The price of Bitcoin is displayed on a screen at the Bithumb Lounge in Seoul, Feb. 3. Newsis
By Lee Yeon-woo
The banking industry is looking to expand its cryptocurrency businesses as the government’s recent decision to gradually allow corporations to invest in virtual assets has fueled expectations for new revenue streams and customer expansion, industry officials said Friday.
The virtual asset committee under the Financial Services Commission (FSC) decided Thursday to allow nonprofit entities, such as universities and social welfare organizations, to open accounts for virtual assets and trade them starting in the second quarter. In the second half of this year, trading accounts will also become available to selected listed companies.
The Korbit Research Center projects that the influx of corporate funds into the virtual asset market could generate 46 trillion won ($31.8 billion) in value by 2030.
In the past, the banking industry tended to take a cautious stance on virtual assets. However, as the industry integrates into the institutional framework and new investors emerge, banks have started pursuing these new business opportunities.
Under current regulations, virtual asset exchanges require customers to have real-name bank accounts. Currently, five banks have established partnerships with Korea’s five major exchanges. This includes Kbank with Upbit, KakaoBank with Coinone, Shinhan Bank with Korbit and Jeonbuk Bank with GOPAX. On March 24, the partnership between KB Kookmin Bank and Bithumb will go into effect.
“Banks have been actively seeking to create value beyond traditional banking services,” a banking industry official said. “The integration of virtual assets into the regulatory framework indicates that risks surrounding the industry have been somewhat mitigated.”
The expansion of the virtual asset business is also driving significant profits.
As of the first half of 2024, Kbank, which partnered with Upbit, noted that 17 percent of total deposits were related to Upbit. Fees from investors’ deposits and withdrawals also made up 40 percent of Kbank’s total fee revenue.
In January, KB Kookmin Bank signed a partnership with Bithumb, which had previously partnered with NongHyup. Following the announcement, account registrations at KB nearly quadrupled, KB said.
Meanwhile, Shinhan Bank extended its partnership with Korbit for another year in December, reinforcing its commitment.
Seen in this combined photo are the headquarters of Korea’s four major commercial banks in Seoul — from left, Shinhan, Woori, KB Kookmin and Hana Bank. Courtesy of each bank
Others are exploring alternative entry points into the crypto industry.
Hana Bank, for example, has yet to partner with an exchange but said it is actively seeking collaboration opportunities with various market participants. In September, it acquired a 25 percent stake in BitGo Korea, a global virtual asset custody service provider, signaling its interest in digital asset management.
Similarly, Woori Bank…
Read More: South Korean banks to expand crypto business as corporate funds set to flow
