The Korea/">Bank of Korea has begun surveying 31 financial institutions about their exposure to risks linked to cryptocurrencies and virtual assets. The review covers 18 banks and 13 brokerages and reportedly began on Oct. 23, according to The Herald Business and Yonhap, citing financial industry sources.

The survey asks institutions about their crypto-related staffing, budgets and business activities, as well as their reasons for entering the market. It also seeks information on investments in domestic and overseas cryptocurrency companies.

Among the scenarios under review is the temporary shutdown of South Korea’s largest cryptocurrency exchange by market share following a major hack or similar incident. The central bank is also examining the potential impact of a sharp fall in crypto prices followed by a prolonged decline in trading activity.

Another question considers the consequences if a different financial institution suffered substantial losses related to a cryptocurrency incident. Responses are reportedly due on Wednesday.

The review began before last week’s $6.3 billion Binance hack, which US authorities attributed to North Korean hackers, but the incident reflects the type of event being considered by the central bank.

The investigation comes as South Korean financial companies continue exploring Stablecoin services. KB Financial Group completed a won-denominated stablecoin pilot in May, while Kakao Pay and KakaoBank partnered with Fireblocks in September to examine digital asset infrastructure.

The Bank of Korea has advocated bank-led stablecoin issuance. However, disagreements over which institutions should be allowed to issue stablecoins have slowed progress on the proposed Digital Asset Basic Act, according to the report.

A Bank of Korea official told The Korea Herald that financial institutions are preparing independently while virtual asset legislation advances more slowly than the market expected.

South Korean regulators have also increased their focus on cybersecurity. In October, the Financial Services Commission proposed stricter security requirements after identifying deficiencies at 130 of 555 financial companies. The proposals include more frequent vulnerability assessments and greater responsibility for executives, following security incidents involving 16 companies, including cryptocurrency exchanges.

Sources: Cointelegraph.