The Bank of Korea has reportedly launched its first survey of banks and brokerages on cryptocurrency-related risks, asking how they would be affected by a major exchange hack, a market crash or heavy losses at another financial institution.
The central bank began surveying 18 banks and 13 brokerages on Oct. 23 as part of its first reported review of financial institutions’ participation in the virtual asset market, according to The Herald Business and Yonhap, citing financial industry sources.
The survey includes questions about each institution’s crypto-related staffing and budgets, business activities and reasons for entering the market, along with amounts invested in domestic and overseas crypto companies.
One scenario asks how financial firms would be affected if South Korea’s largest crypto exchange by market share temporarily suspended operations following a major hack or similar incident.
Other questions address a steep fall in cryptocurrency prices followed by a sustained trading slump, and the potential fallout if another financial institution suffered heavy losses from a crypto-related incident.
The survey began before last week’s $6.3 billion Binance hack, but the incident highlights the type of risk the central bank is examining. US authorities have attributed the attack to North Korean hackers.
Responses are reportedly due on Wednesday.
South Korean banks explore stablecoins amid regulatory delays
The review comes as South Korean financial firms have continued testing stablecoin services.
KB Financial Group completed a won-denominated stablecoin pilot in May, while Kakao Pay and KakaoBank partnered with Fireblocks in September to explore digital asset infrastructure.
The Bank of Korea has pushed for bank-led stablecoin issuance, while disagreements over which institutions should be permitted to issue stablecoins have complicated progress on the proposed Digital Asset Basic Act.
“Financial institutions are making their own preparations even as virtual asset legislation is moving more slowly than the market expected,” a Bank of Korea official told The Korea Herald.
Regulators have also stepped up cybersecurity scrutiny. In October, the Financial Services Commission proposed tougher security requirements after finding deficiencies at 130 of 555 financial companies.
The proposals include more frequent vulnerability assessments and greater executive accountability, following security incidents involving 16 companies, including crypto exchanges.
Related: FBI blames North Korea for record $6.3B Binance hack