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December 4, 2021

Traditional Exchange in South Korea Looking to Join Crypto

South Korea, like a number of other Asian countries, is making serious moves in the cryptos space. The country’s security exchange operator, KRX (Korea Exchange) says it is looking for ways to “embrace” crypto assets. This was a statement made by the exchange’s chairperson, Sohn Byung.

The chairperson of the exchange told people present at a financial conference that it was time to do this. He added that the market for crypto assets is the same as that of capital markets. Sohn cited the similarities being in regards to investor protection. He added that transaction stability should also be supported. Sohn said they would utilize what they had learned in the stock market. With that knowledge, they would attempt to start engaging in the crypto asset business.

The Face of Investing is Changing in South Korea

This decision is coming at a time when the major crypto exchanges in South Korea are extremely profitable. The country’s top four domestic crypto exchange platforms currently have a combined user base of 5 million. In addition, these crypto markets trade approximately US$ 12 million in stock value on a daily basis. It is worth noting that this US$ 12 million is very close to what KOSPI trades on a daily basis as well. For these reasons, perhaps among others, the traditional exchange is ready to contemplate joining this new type of investment frontier. The crypto exchange may one day exceed the domestic exchange trade value.

Perception of Investors in South Korea about Investing

South Korea’s investors that happen to be among the country’s economic elite are typically not on board with crypto as of yet. They are typically still somewhat against crypto. This is according to a recent survey of the country’s richest. However, the fact of the matter remains that there are still significant numbers of investors who are now seeing better opportunities and value in crypto investing than in South Korea’s mainstream stock exchanges. Some of these forward-thinking investors that have turned to crypto investing are quite young but even older investors are now jumping onto the bandwagon. KRX and KOSPI index may become archaic soon.

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Preparation for Exchange’s Framework

The chairman of the KRX said it is time to start preparing an institutional framework. These comments are about 12 months after the exchange stated it would conduct more focused monitoring of crypto-related stocks. It is possible this announcement was made back then due to concerning volatility of stocks that were related to the crypto industry.

KRX has monitored whilst share prices of some stocks have risen along with crypto prices. One such example is the Bithumb exchange which has seen Vidente profit. Vidente is a listed non-crypto company. It has seen itself benefit from these same rising crypto prices because of its investment in a minor stock exchange called Bithumb.

Domestic Crypto Exchanges in Korea going Global

Some of South Korea’s domestic crypto exchanges are now considering spreading their wings. This is probably another observation that KRX made. It is also likely another reason it’s paying serious attention to crypto now. Some analysts think that the domestic crypto exchanges in South Korea may have found that they have or will outgrow their country’s market. For that reason, they are watching for initial public offerings in other parts of the globe where they can continue to expand. As such, some of South Korea’s crypto exchanges may follow in the footsteps of Coinbase and get floated in the United States.

About KRX

The Korea Stock Exchange was established in 2005. It was founded by the consolidation of a number of domestic markets. At present, it is the only securities exchange operating in South Korea. It has its head offices in Busan.