The financial watchdog in South Korea is creating new instruments to continuously monitor crypto threats.
While the crypto market’s influence on the conventional financial system is presently minimal, the regulator cautioned that in the future, such threats to the nation’s financial stability could rise significantly.
At a conference on the connections between the cryptocurrency market and the conventional financial market, FSS Governor Lee Bok-hyun reportedly disclosed Monday that the Financial Supervisory Service (FSS) of South Korea intends to create crypto monitoring tools and regularly examine the risks associated with crypto assets.
This year, the Financial Supervisory Service is preparing a number of initiatives for the risk management of the market for virtual assets.
Regarding the crypto monitoring tools, Lee clarified that despite the predicted growth in the degree of interconnectedness between the crypto market and the regular financial system, the supervisory authority now lacks data to identify potential dangers from crypto.
Data security, the FSS director emphasized, “is more crucial than anything else in order to prevent hazards in the virtual asset market.”
The stability of the financial system hasn’t really been affected by the growth of the virtual asset market.
However, Lee warned that if the local crypto market expands enough, the impact on financial stability could rise sharply.
The regular banking sector and the bitcoin market are merging more and more, regulators have warned.