BOK Says Crypto Market May Need Circuit Breakers

The Bank of Korea said the cryptocurrency market may need circuit breakers and other trading controls to improve operational stability.

In its Payment and Settlement Report published on April 13, the central bank said stronger systemic safeguards are needed to prevent errors and abnormal trades in crypto transactions.

The BOK cited weak internal controls at crypto exchanges as a key risk factor. Exchanges need dual-verification procedures and automated control systems that can detect or block human errors, including employee input mistakes, before they affect trading.

The central bank also said exchanges need a framework that can check in real time whether internal ledgers match actual asset balances on the blockchain. That would help reduce the risk of trades or mistaken payments that exceed assets held.

It also called for a review of mechanisms that temporarily halt trading during abnormal market conditions, such as sharp price swings or large orders. The BOK said the concept is similar to stock-market circuit breakers and could help cushion market shocks during periods of rapidly rising volatility.

The central bank said these system upgrades could improve the credibility and stability of the broader cryptocurrency market.