Yonhap, a mainstream media outlet in South Korea, reported that commercial banks in the country are holding nearly $2 billion USD worth of cryptocurrencies. Although the digital asset holdings of regulated financial institutions in South Korea only account for 8% of their total assets under brokerage, local publications reported the fact that digital assets, as an emerging asset class, already accounts for a portion of the holdings of commercial banks is significant.
“The amount of crypto-asset investment is not really big, compared with other equity markets, and local financial institutions’ exposure to possible risks of digital assets is insignificant. Against this backdrop, we expect crypto-assets to have a limited impact on the South Korean financial market.” In April 2018, it was reported that South Korea’s biggest crypto exchange Bithumb, held more than $6 billion in user funds stored in cryptocurrencies.
Although, this figure was from when the valuation of the crypto market reached $900 billion, and cryptocurrencies such as Bitcoin achieved a new all-time high at over $20,000. Due to its status as a publicly listed company in the South Korean stock market, Bithumb is required by local authorities to disclose their holdings and revenues to investors in the public market.
Hence, given the substantial decline in the valuation of major digital assets since December of 2017, the holdings of the country’s biggest crypto exchange are now likely in the $1 billion region. As of July, commercial banks in South Korea hold more in digital assets that the country’s biggest crypto exchange in Bithumb.
While their holdings of digital assets are substantially smaller than its holdings in traditional assets like bonds and stocks, the fact that commercial banks remain as the largest holders of cryptocurrencies is significant, especially in the cryptocurrency industry still at its infancy and growing at an exponential rate. Commercial banks in South Korea have generally been more enthusiastic towards cryptocurrencies, digital assets and the blockchain technology than banks in other regions. Read more from cryptoslate.com…
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