TechFlow news, December 23 — According to Yonhap News Agency, the Bank of Korea stated in its recently released "Second-half Financial Stability Report" that as global virtual asset markets become increasingly institutionalized, the linkages between virtual asset markets and traditional financial markets are strengthening. The report analyzes that heightened participation by corporations and institutional investors, along with the launch of exchange-traded funds (ETFs), has created connecting channels between virtual assets and traditional financial markets worldwide.
The Bank of Korea noted that volatility in virtual asset prices is primarily transmitted to traditional financial markets through stock markets, with this transmission effect becoming more pronounced during periods of macroeconomic shocks or shifts in monetary policy. In contrast, due to a strict regulatory environment restricting corporate participation and financial product offerings, South Korea's domestic virtual asset market shows a relatively low transmission effect index. The Bank of Korea recommends that, during the process of virtual asset institutionalization, an effective management system should be established to keep potential risks between traditional financial markets and virtual asset markets within manageable limits.
