Key Takeaways:

• The BIS Financial Stability Institute warned in April 2026 that major crypto platforms like Binance and Coinbase now operate more like banks than trading venues.
• Celsius Network collapsed in 2022 after a USD 1.4 billion depositor run exposed maturity mismatches with no deposit insurance backstop.
• Only 11 of 28 jurisdictions reviewed by the FSB in 2025 had a finalized regulatory framework addressing financial stability risks from crypto intermediaries.

Crypto Earn Accounts Exposed as Uninsured Deposits, BIS Research Warns

The report, authored by Denise Garcia Ocampo of the BIS and Peter Goodrich and Gian-Piero Lovicu of the Financial Stability Board, focused on what researchers call multifunction crypto asset intermediaries, or MCIs. The term covers firms like Binance, Bybit, Coinbase, Crypto.com, Kraken, MEXC and OKX.

These platforms have expanded well beyond spot trading and custody. They now offer yield-bearing earn accounts, margin lending, derivatives, and token issuance, functions typically separated across different licensed entities in traditional finance.

The total crypto asset market stood at approximately $3 trillion at the end of 2025. Centralized exchanges processed roughly $6 to $8 trillion in spot and futures volume each quarter. Binance alone held about 39% of global centralized spot trading volume. The top five MCIs collectively served an estimated 200 to 230 million users.

The paper’s central concern is the earn product. When customers deposit crypto into Binance Simple Earn or Bybit Easy Earn, terms and conditions transfer ownership of those assets to the platform. The MCI pools the funds, deploys them across lending, market-making and DeFi, and pays users a variable yield. Customers become unsecured creditors, not depositors with legal protections.

That structure creates short-term redeemable liabilities backed by longer-duration or less liquid assets. Researchers call this maturity and liquidity transformation, the same risk that bank regulators manage through capital and liquidity requirements. MCIs face it without those guardrails.

The collapse of Celsius Network in 2022 illustrated the exposure. Celsius experienced net withdrawals of more than $1.4 billion between May and June of that year. By June 12 the platform froze withdrawals. When it filed for bankruptcy on July 12, its balance sheet showed a billion-dollar deficit. The bankruptcy court confirmed Celsius earn users were general unsecured creditors.

A flash crash on Oct. 10, 2025, reinforced the concern. Crypto asset prices fell sharply over 30 minutes, triggering cascading automated liquidations across derivatives platforms. Reported direct losses reached $19 billion the following day. Binance suffered an operational outage during the event, and three tokens used as margin collateral, including an algorithmic stablecoin, temporarily lost their pegs. Binance announced $283 million in customer compensation following the incident.

The report reviewed terms and conditions from eight major MCIs between November 2025 and March 2026 and found that most earn products grant the platform full discretion over deposited assets, commingle them with other customer funds, and reserve the right to suspend redemptions without notice.

Leverage adds further risk. Some platforms allow retail customers up to 150-to-1 margin on derivatives contracts. The paper draws a direct line from that leverage to the October 2025 liquidation cascade.

The FSB’s 2025 thematic review found that only 11 of 28 participating jurisdictions, roughly 39%, had a finalized regulatory framework addressing financial stability. Just two of those covered borrowing and lending by MCIs. Three covered earn products.

The authors call for prudential capital and liquidity requirements, governance standards, stress testing and consolidated supervision applied at the group level. They recommend a combination of entity-based and activity-based regulation, noting that activity-based rules alone cannot address the funding and liquidity risks MCIs carry.

Cross-border cooperation remains a core gap. Many large MCIs allocate functions across dozens of jurisdictions through separate legal entities, and formal supervisory information-sharing agreements between regulators remain uncommon.

Key Takeaways:

• Bank of Korea (BOK) Governor Shin Hyun-song, sworn in on April 21, 2026, made CBDC and deposit tokens the centerpiece of his inaugural address.
• Project Hangang Phase 2, now involving 9 banks, targets government subsidy use cases worth up to 110 trillion won ($73B).
• Shin’s omission of stablecoins from his first speech signals a state-first digital won strategy as South Korea finalizes its Digital Asset Basic Act.

Project Hangang Phase 2 Takes Center Stage as New BOK Governor Outlines Digital Won Plans

Shin took office, succeeding Rhee Chang-yong at the start of a four-year term. His first major policy speech made no mention of won-denominated stablecoins, a notable omission given that South Korea is actively debating stablecoin rules under the pending Digital Asset Basic Act.

The BOK’s position, as Shin framed it, centers on a two-tier model. The central bank issues a wholesale or hybrid CBDC. Commercial banks issue deposit tokens that are fully convertible and designed for everyday payments and settlements. Neither layer leaves room for a privately issued alternative at the top of the stack.

Shin pointed directly to Phase 2 of Project Hangang, the BOK’s flagship digital won pilot, as the mechanism to “increase the usability of CBDC and deposit tokens.” Phase 2 launched in March 2026 and has since expanded to nine major commercial banks. Real-world transaction testing is underway, with potential applications including government subsidy disbursements valued at up to 110 trillion won, approximately $73 billion.

Phase 1 of Project Hangang focused on technical testing of a blockchain-based digital won. Phase 2 moves into applied use, exploring programmable money, regulatory compliance tools, and integration with existing payment infrastructure.

Shin also referenced BOK’s participation in Project Agora, a BIS-led cross-border tokenization initiative. The project explores multi- CBDC platforms for faster international payments and settlements. For Shin, BOK involvement in Agora ties directly to a stated goal of expanding the Korean won’s role in global digital payments without loosening capital controls or destabilizing the financial system.

Additional priorities in the speech included 24-hour foreign exchange trading, an offshore won settlement system, and tighter oversight of crypto markets and non-bank financial institutions. Shin said the BOK would pursue “cautious and flexible” monetary policy throughout his term.

The stablecoin omission drew immediate attention from observers. During his mid-April confirmation hearing before parliament, Shin had taken a more open position. In written remarks submitted to lawmakers, he stated that CBDCs and deposit tokens would “coexist with stablecoins in a manner that is supplementary and competitive to each other,” and that any stablecoin issuance should begin with regulated banks. The shift in tone from nominee to governor was deliberate, according to observers watching the process.

Shin brings a specific international background to the role. He served as Economic Adviser and later Head of the Monetary and Economic Department at the Bank for International Settlements from 2014 until early 2026. Before the BIS, he held academic posts, including a position at Princeton University. His tenure at the BIS overlapped with several collaborative CBDC experiments, including earlier joint projects involving South Korea.

The commercial banking sector stands to gain significant positioning under Shin’s framework. Deposit tokens place commercial banks at the center of digital money distribution, giving them a direct role in programmable finance while keeping central bank oversight intact.

Crypto markets and non-bank financial entities face increased scrutiny under the new governor. Shin pledged better data access for risk tracking and closer monitoring of activity outside the traditional banking system.

South Korea’s CBDC development has progressed through two governors. Rhee Chang-yong advanced technical pilots and explored subsidy applications. Shin takes over at the commercialization phase, with a clear preference for regulated, interoperable infrastructure over broader private-sector experimentation.