South Korea’s Central Bank Tests How Prepared Lenders Are for a Crypto Shock

Since Oct. 23, the Bank of Korea has been sending questionnaires to 18 banks and 13 brokerages to learn how deeply they are tied to digital assets. It is reportedly the first time the authority has formally reviewed this area. Firms are expected to submit their answers on Wednesday.

Stress Scenarios in the Questionnaire

Lenders must disclose their crypto teams, spending, motives for entering the market and money placed in local and foreign crypto businesses. They are also asked to judge three shocks: a hack that forces the nation’s top exchange offline, a steep price collapse followed by weak trading, and big crypto losses at a peer institution.

Binance Hack and Cybersecurity Pressure

The exercise began before the $6.3 billion Binance breach, which US officials link to North Korean hackers, but the case shows why such planning matters. In October, the Financial Services Commission found security gaps at 130 of 555 financial companies. It now wants frequent vulnerability testing and more executive accountability after 16 firms, including exchanges, suffered incidents.

Stablecoin Pilots Continue Despite Slow Legislation

KB Financial Group finished a Korean won stablecoin pilot in May, while Kakao Pay and KakaoBank joined Fireblocks in September to study infrastructure. Disagreement over who may issue stablecoins is holding up the Digital Asset Basic Act, even though the central bank prefers bank issuers.