Bank of Korea directs old financial regulations for cryptocurrency market

 

Bank of Korea :

directs old financial regulations for cryptocurrency market

1. The Central Bank of Korea stressed
2. the need for financial authorities to
3. enhance regulatory efficiency.

A study from the Bank of Korea (BOK) was published on:

• Thursday stressing the importance of

• providing a similar level of regulation linking traditional banks to

• the cryptocurrency market.

The Central Bank also emphasised the possible dangers connected to trading cryptocurrencies.

Warning that any financial turmoil caused by this sector could cause significant damage to the real economy.

The Bank of :

Korea report specifically addressed

the expansion of the use of stablecoins

Noting that their wide adoption can have an impact on overall financial stability, including monetary and payment systems.

To address this concern :

The monetary authority emphasised the value of financial institutions improving

• the efficiency of

• regulations through closer cooperation in terms of surveillance

• information collection and supervision of cryptocurrencies.

Furthermore :

• the Central Bank of Korea stressed the need

• for the government and regulators to treat

• the cryptocurrency industry with a similar perspective as with traditional banks.

The central bank report comes as Kim Nam-Cook, South Korea's former opposition lawmaker, stands at the center of the cryptocurrency scandal.

Encryption needs strong organization

This recommendation reflects ongoing concerns arising

from recent cryptocurrency collapses

1. Such as the collapse of Terra
2. Luna and the bankruptcy of FTX
3. resulting in huge losses to investors.

However, due to the lack of clear regulatory guidance, affected investors were unable to take specific action to mitigate their losses.

The above crypto shocks are attributable to risks arising from unsustainable business structures, precarious liquidity and non-transparent financial conditions among market participants.

These risk factors show patterns similar to

those observed during previous financial crises

This further emphasizes the need

for strong regulation and control in the cryptocurrency market.

In stark contrast to UK lawmakers :

The Central Bank of Korea study urges the Korean financial sector to take aggressive measures to address any possible dangers posed by cryptocurrencies.

Through the implementation of a regulatory framework similar

to that governing traditional banks

The authorities aim to protect the stability of the financial system and investors from future cryptocurrency disruptions.

How authorities will react to the Bank of Korea's suggestions is yet to be seen.

However :

1. it is clear that a comprehensive
2. and balanced regulatory approach is critical
3. to protecting investors' interests

Maintain financial stability

and promote healthy development of Korea's cryptocurrency market.