Bank of Korea warns crypto shocks could spill over to traditional markets

The Bank of Korea (BOK) has warned that shocks in the cryptocurrency market could spill over into traditional stock and foreign exchange markets as the connection between them strengthens. This assessment was included in the central bank's Financial Stability Report for the first half of 2026, released today, Kookmin Ilbo reported. The BOK analyzed that the potential for contagion from crypto to traditional finance is growing due to a more diverse investor base and evolving market structures. The report noted that the immediate impact on South Korea's financial markets is currently limited, as spot and futures crypto exchange-traded funds (ETFs) are not yet permitted and corporate participation is restricted. However, the bank cautioned that if institutional and corporate involvement expands in the future, a significant price shock in crypto assets could spread to the nation's stock and foreign exchange markets.