Bank of Korea Conducts Cryptocurrency Risk Survey of 31 Financial Institutions, Including Possible Exchange Suspension

Key Points of This Article

• 18 banks including the five major banks and 13 securities firms, with a response deadline of November 4
• Understanding the preparedness of financial institutions amid legislative delays

Bank of Korea Conducts Initial Survey of 31 Financial Institutions

On October 23, the Bank of Korea, South Korea's central bank, requested cooperation from 18 banks, including KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup, as well as 13 securities firms, to survey the current state and risks of cryptocurrency businesses. According to reports from Yonhap News and Herald Economy on the 2nd, this is the first time the Bank has conducted such a survey.

The survey is titled "Survey on the Current Status of Financial Institutions' Entry into the Virtual Asset Market." It inquired about each company's cryptocurrency-related organizations and budgets, business progress and plans, main motivations for market entry, and investment amounts in domestic and foreign cryptocurrency-related companies. The evaluation of business risks and response systems are also included. The response deadline is November 4, and the Bank will use the collected responses as internal reference materials. A Bank official explained that the purpose is to confirm the current situation and preemptively check future conditions.

Anticipating Suspension of Leading Exchange Operations

The survey included specific stress scenarios. One question asked how much impact would occur to financial institutions if the leading domestic cryptocurrency exchange temporarily suspended operations due to a large-scale hacking incident. This is presented as a hypothetical scenario, not an actual incident. It also considers situations where the prices of Bitcoin (BTC) and others plummet, leading to prolonged trading stagnation. It inquires how the impact would spread to their own company if other financial institutions suffered significant losses due to cryptocurrency-related incidents.

The survey began before a hacking incident at Binance, the world's largest exchange, which involved approximately $6.3 billion. Herald Economy reported that tensions are rising in South Korea's cryptocurrency industry in response to this incident.

Legislative Delays and Financial Institutions' Movements

A Bank of Korea official explained to Herald Economy that while legislation related to virtual assets is lagging behind market expectations, financial institutions are making preparations. Existing operations can be monitored through business reports and information sharing with the Financial Supervisory Service, but there is still insufficient information regarding cryptocurrency businesses. The plan is to gather basic data for each bank and securities firm for consideration.

Regarding stablecoins, the Bank of Korea has been advocating for issuance led by banks. Opinions are divided on which institutions should be allowed to issue them, causing delays in the legislation of the Digital Asset Basic Law. On the financial institution side, KB Financial Group completed a technical verification (PoC) for a won-denominated stablecoin in May.

In a report in November 2025, the Bank warned of the potential for risks to be transmitted between the cryptocurrency market and traditional financial markets through coin runs (bank runs) as stablecoins become more widespread. In the June Financial Stability Report, it pointed out the need to pay attention to the impact of cryptocurrency price fluctuations on the supply and demand of the stock market and foreign exchange.

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