According to the South Korean central bank, BOK, local banks hold roughly $2 billion worth of cryptocurrencies that amounts to a very small percentage of total investments. However, despite such a number the financial institutions are still wary and reserved about the crypto market.
Bank of Korea: Limited impact of crypto assets
The local banks of South Korea hold about 1.9 billion USD worth of cryptocurrencies in their accounts as per the latest report by the central bank of the country i.e. the Bank of Korea (BOK). According to the local media channel of the country, Yonhap News, as of December last year, the outstanding balance of virtual assets in the local banks reached almost $2 billion.
Central Bank’s report states that despite such a big number, the interest of local banks in the cryptocurrencies remains low. Moreover, in comparison to the total deposits operated by South Korean brokerage houses which is worth around 26 trillion won, the share of crypto assets is not much as it only amounts to about 8 percent.
The news outlet quoted the BOK report as saying,
“The amount of crypto-asset investment is not really big, compared with other equity markets, and local financial institutions’ exposure to possible risks of digital assets is insignificant.”
They further stated,
“Against this backdrop, we expect crypto-assets to have a limited impact on the South Korean financial market.”
Looking for regulation clarity
Cryptocurrencies are still in a nascent stage as Bitcoin is only 9 years old. Moreover, the crypto industry has yet to see a good chunk of institutional investment that could drive this number higher. And the lack of clear regulations and government’s stance on cryptocurrencies are the factors limiting these investors from making an entry into the crypto market.
Given the South Korean government’s stance on cryptocurrencies where they banned the Initial Coin Offerings (ICO) and imposed strict regulations and restrictions on crypto exchanges and anonymous crypto trading, banks, financial institutions and institutional investors have yet to take an active step forward.
Since then, the government has relaxed these measures to a degree. The latest reports also suggest that the government might even take a potential step towards legalizing this industry. However, investors are still waiting for clear regulatory guidelines from the authorities.
What are your views on crypto investment amounting to only 8% of total investments?
Passionate about Blockchain and has been researching and writing about the Blockchain technology for over a year now. Also holds expertise in digital marketing. follow me on twitter at @sagar2803 or reach out to him at sagar[at]coingape.com