The Bank of Korea (BOK) released a report on Thursday emphasizing the
importance of introducing a comparable level of regulation that binds traditional banks into the cryptocurrency
market. The central bank also highlighted
the potential risks associated with crypto trading, warning that any financial
turmoil stemming from this sector could inflict significant damage on the real
economy.
BOK’s report specifically addressed the expanding usage of
stablecoins, noting that their widespread adoption could have an impact on
overall financial stability, including monetary and payment systems. To address
this concern, the monetary authority stressed the importance for financial authorities to
enhance the efficiency of regulations by establishing closer cooperation in
terms of monitoring, information collection, and supervision in the
cryptocurrency space.
Furthermore, the BOK emphasized the need for the government and regulatory
bodies to approach the crypto industry with a similar perspective as they do
with traditional banks. The central bank’s report comes at a time Kim Nam-kuk, South Korea’s former opposition lawmaker stands at the centre of a crypto scandal.
This recommendation reflects the lingering fears stemming from recent
cryptocurrency debacles, such as the Terra-Luna collapse and FTX bankruptcies,
which resulted in substantial losses for investors. However, due to the absence
of clear…
