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Bank of Korea Seeks $42B Bithumb Halt to Curb Crypto Volatility
Regulators aim to integrate emergency circuit breakers into pending legislation to prevent flash crashes. Watch for legislative shifts impacting liquidity.
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Seoul Pushes for Market Guardrails
The Bank of Korea is calling on lawmakers to introduce circuit breakers for the digital asset sector. This proposal follows a period of extreme volatility that saw $42 billion in trading volume wash through the Bithumb exchange. Central bank officials argue that specific mechanisms are needed to pause trading when prices experience sudden, extreme swings.
Regulators are currently drafting new frameworks to oversee the crypto market analysis within the country. The central bank's recommendation seeks to integrate these emergency stop measures into the broader legislative package currently under review by South Korean politicians.
The Case for Market Stability
Financial authorities in Seoul are wary of the risks posed by rapid price movements. The sheer scale of the Bithumb activity has forced officials to reconsider how digital assets interact with traditional financial stability. By mandating a pause during periods of panic or irrational exuberance, the Bank of Korea hopes to limit the fallout from flash crashes.
"Legislators should consider implementing measures to halt trading in cryptocurrency in the event of unexpected price fluctuations," the Bank of Korea stated in its recent proposal.