Four South Korean banks plan to expand their crypto custody services as competition in the industry begins to intensify.
4 South Korean banks expand crypto custody services
So far, only a handful of banks have agreed to work with cryptocurrency exchanges and offer real-name banking services to their customers, while the majority of the other banks have “for the time being” given up the concept of working with trading platforms.
But it seems banks are much more comfortable with the idea of helping exchanges store fiat and crypto customers.
According to Asia Kyungjae, some of South Korea’s largest banking players have been looking for indirect ways to get into the crypto-custody game as current banking laws prevent mainstream financial institutions from handling electronic money. However, banks could avoid this by setting up joint ventures or engaging in M&A activities.
And as mentioned earlier, up to four South Korean banks want to expand their crypto custody services.
4 Korean banks expand crypto custody services: NongHyup
Asia Kyungjae notes that NH is “the most active player in the custody business” and has made a “strategic equity investment” in a custody specialist named Cardo in the past few days. The latter is currently preparing to launch a new service and wants to build its reputation through “Certification of an Information Security Management System” from a government agency. The introduction of digital KRW custody services is also planned.
4 Korean banks expand crypto custody services: Kookmin (KB Bank)
KB signed an agreement with Haechi Labs and Hashed last November to co-found Korea Digital Assets (KODA) Venture, becoming the first bank in the industry to offer digital asset custody services. It has drawn a number of prominent clients in the time since its inception, including crypto-savvy gaming giant WeMade.
4 South Korean banks expand crypto custody services: Shinhan
Shinhan also made a “strategic equity investment” in Korea Digital Asset Trust (KDAC), a “digital asset management company”. It also has some notable clients like NXC, the parent company of gaming giant Nexon, which also owns the Bitstamp and Korbit exchanges. Alpha Asset Management is also a customer.
4 South Korean banks expand crypto custody services: Woori
Woori has teamed up with fast-growing cryptocurrency and blockchain development company Coinplug to launch a crypto-custody company called Decustody.
The media also noted that in addition to cryptocurrencies like Bitcoin (BTC), banks are looking to expand their custody services to non-fungible tokens (NFTs) and Services Security Token Service (STO).
An industry insider stated that banks’ crypto custody does not require money laundering checks, which means that custody “from the bank’s point of view” is “less burdensome” than providing banking services to stock exchanges. The person added that custody can “generate commission income” for banks while also providing “an opportunity” for banks to enter the sector they have been looking for for some time.
Meanwhile, a South Korean university says it is trying to create a set of regulatory standards for the crypto sector that can be applied across Northeast Asia.
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