With regulations easing, South Korean banks are racing to secure deals with major crypto exchanges, reshaping the financial landscape.
Banks in South Korea Rush to Secure Crypto Partnerships
South Korean banks are more eager than ever to strike partnership deals with the country’s top crypto exchanges, particularly as regulatory changes pave the way for institutional Bitcoin (BTC) holdings.
According to local reports, the country’s leading exchange, Upbit, is at the center of banking interest as its contract with K Bank is set to expire in October. Several traditional banks, including KEB Hana Bank and Woori Bank, are closely monitoring the situation, seeking opportunities to enter the crypto space.
South Korea’s Regulatory Shift Fuels Interest
Regulators are expected to permit South Korean firms to hold cryptocurrencies on their balance sheets later this year. This policy shift is projected to significantly expand the country’s crypto market, pushing banks to actively pursue exchange partnerships.
While banks were once hesitant due to security concerns, attitudes have shifted. The competition for partnerships has intensified, with financial institutions recognizing the potential for growth in the digital asset sector.
Limited Options, High Demand
Only five South Korean crypto exchanges are authorized to offer KRW-crypto trading pairs, limiting banks’ options. One of these exchanges, GOPAX, has faced financial struggles, leaving even fewer viable candidates for partnerships.
Upbit’s biggest competitor, Bithumb, recently ended its partnership with Nonghyup Bank in favor of a landmark deal with Kookmin Bank, South Korea’s largest bank. Other major partnerships include:
- Coinone with Kakao Bank
- Korbit with Shinhan Bank
These partnerships signal a major shift in the relationship between traditional banks and the crypto industry.
The Future of Banking and Crypto in South Korea
Experts predict that if larger South Korean corporations start trading Bitcoin and other tokens, market liquidity will improve, attracting more retail investors. Banks see this as an opportunity to expand beyond their traditional business models and remain competitive.
Despite this growing enthusiasm, some financial institutions remain cautious. A South Korean bank official warned that crypto transactions could still pose money laundering risks, requiring banks to carefully evaluate potential partnerships.
K Bank’s Strong Position in Crypto
K Bank and Upbit have enjoyed a successful collaboration since the early 2020s. The neobank has over 6,000 corporate clients and provides crypto wallet-linked accounts to 49 government agencies, including tax offices and prosecutors. This existing infrastructure gives K Bank an edge over traditional banks seeking to enter the crypto space.
As competition heats up, South Korea’s banking sector is undergoing a transformation, embracing crypto as a key component of its future strategy.
Disclaimer:
The information provided on 13Desk is for informational purposes only and should not be considered financial advice. We strongly recommend conducting your own research and consulting with a qualified financial advisor before making any investment decisions. Investing in cryptocurrencies carries risks, and you should only invest what you can afford to lose. 13Desk is not responsible for any financial losses incurred from your investment activities.
