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The South Korean financial regulator is developing new tools for monitoring crypto risks on a regular basis. The regulatory body warned that although the impact of the crypto market on the traditional financial system is still small, the risks posed by cryptography to the financial stability of the country could greatly increase in the future.
Korean Regulator Developing Crypto Monitoring Tools
South Korea’s Financial Supervisory Service (FSS) is planning to develop crypto monitoring tools and regularly inspect the risks associated with crypto assets, FSS Governor Lee Bok-hyun reportedly revealed Monday at a conference on the interconnectedness between the crypto market and the traditional financial market. He was quoted by local media as saying:
The Financial Supervisory Service is planning various initiatives for the risk management of the virtual asset market this year.
With respect to crypto surveillance tools, lee explained that the supervisory authority currently lacks data to identify potential risks from crypto even though the interconnection between the crypto market and the traditional financial market is expected to increase.
"In order to respond to risks in the virtual asset market in a preventive manner, securing data is more important than anything else," said the fss manager. Furthermore, LEE stated that the regulator plans to introduce new disclosure requirements related to cryptography.
Impact of the crypto marketplace on the traditional financial marketplace.
The FSS governor noted that no national financial corporation provides direct crypto services, adding:
Despite the growing virtual asset market, the direct impact on the financial system's stability remains low.
However, if the size of the national crypto market increases significantly, its impact on financial stability could increase dramatically, Lee warned.
Regulators worldwide have warned that the interconnectedness between the traditional financial market and the crypto market is increasing. The head of the FSS stressed that several countries "introduce fully-fledged regulatory measures for health stability" as a result of the collapse of the terra-luna ecosystem.
What is your opinion on the fact that South Korea is considering monitoring the risks associated with the cryptography market on a regular basis? Please let us know in the comments below.
