The South Korean financial regulator is developing new tools to regularly monitor cryptocurrency risks. The regulator warned that while the impact of the crypto market on the traditional financial system is still low, the risks that cryptocurrencies pose to the country’s financial stability could increase considerably in the future.
Korean Regulator Develops Crypto Monitoring Tools
The South Korean Financial Supervisory Service (FSS) plans to develop cryptocurrency monitoring tools and regularly inspect the risks associated with cryptocurrency assets, FSS Governor Lee reportedly revealed Monday. Bok-hyun, at a conference on the interconnection between the cryptocurrency market and the traditional financial market. He was quoted by local media as saying:
The Financial Supervisory Service plans various initiatives for risk management in the virtual asset market this year.
Regarding cryptocurrency monitoring tools, Lee explained that the supervisory authority currently lacks data to identify potential risks of cryptocurrencies, although the interconnection between the cryptocurrency market and the traditional financial market is expected to increase.
“To respond preemptively to risks in the virtual asset market, securing data is more important than anything else,” the head of FSS emphasized. Furthermore, Lee said that the regulator plans to establish new disclosure obligations related to cryptocurrencies.
The impact of the crypto market on the traditional financial market
The FSS governor noted that no national financial company directly provides cryptocurrency-related services, adding:
Despite the growth of the virtual asset market, the direct impact on the stability of the financial system is still low.
However, if the size of the domestic crypto market were to expand significantly, its impact on financial stability could be greatly increased, Lee warned.
Regulators around the world have warned that the interconnection between the traditional financial market and the crypto market is growing. The head of FSS noted that several countries are “introducing comprehensive regulatory measures for stablecoins” following the collapse of the Terra-luna ecosystem.
What do you think about South Korea’s planning to regularly monitor the risks associated with the crypto market? Let us know in the comments section.
image credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or a solicitation of an offer to buy or sell, or a recommendation or endorsement of any product, service or company. bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.