Crypto news today looks at the numerous collaborations of Korean banks looking to get into crypto custody services. The largest bank in South Korea, Woori Financial Group, has announced a crypto custody service. In doing so, the bank is said to be partnering with Coinplug to develop a joint venture called D-Custody to hold digital assets.
Crypto News from Korea
According to a report by Korean Economic Daily on 11 Jul, Woori Financial Group has announced the launch of a crypto custody service. Woori Bank is the largest in Korea and more and more leading, South Korean banks are joining the joint venture with small stakes. This allows them to enter the crypto custody market while complying with local regulations.
In the process, the bank is partnering with bitcoin-based fintech solutions company Coinplug to form a joint venture to provide custody for digital assets. The name of the joint venture is said to be D-Custody and it is expected to be incorporated as early as the next few weeks. However, Coinplug is said to be the largest shareholder, followed only by Woori Bank.
Banks’ hands are tied when it comes to cryptocurrencies
Korean legislation enshrines that domestic companies cannot access the services of cryptocurrency exchanges. This means that banks can only access the crypto market through joint ventures of equity investments. Therefore, more and more Korean financial institutions are setting up joint ventures with partial ownership so that they too can gain a foothold in the industry. By prohibiting local banks from getting into the custody of cryptocurrencies, they have found such an excellent solution and this crypto news from Korea is therefore very interesting.
Now, in order for the largest Korean bank to enter this market, they are cooperating with the fintech company. A representative of Woori Bank commented as follows:
In overseas markets, digital asset custody has become a successful and established practice among new services offered by banks.
Four of the top five banks are cooperating
Crypto news previously reported that by August 2020, four out of five dhe largest banks in South Korea intend to introduce a custody service. In addition to Woori Bank, Kookmin Bank, NH Nonghyup Bank and Shinhan Bank are also interested in this launch. As early as March 2020, the country’s largest financial institution, Kookmin Bank had submitted a trademark application for the custody servie. This was established in November 2020 in cooperation between Korea Digital Asset Co. with venture fund Hashed and local blockchain service provider Haechi Labs. The CEO of Hashed, Simon Kim, commented on the cooperation as follows:
I welcome this opportunity to work with KB Kookmin Bank to help South Korea take the lead in the emerging digital asset market. The combination of our insight into the blockchain industry and the provision of both technical and commercial advice will inevitably open new doors for consumers as well as for the country as it ushers in the new era of digital transformation.
Shortly after Kookmin’s application, Nonghyup Bank formed a blockchain financial services consortium with blockchain developer Hexlant. The group also announced plans to cooperate with Korea Information & Communications Co.
Shinhan Bank said in January 2021 that it had made a strategic investment. It invested in crypto custody consortium Korea Digital Asset Trust, which is backed by Kobi, the major local exchange.
Digital custody services through banks are more recognized
As we have often read in crypto news, custody of crypto assets by banks are more accepted by regulators. In Germany, banks are also able to hold cryptocurrencies in custody as well as shares. This has become possible due to the new money laundering law. The same is true in the United States, where it is also allowed to offer custody services for cryptocurrencies to banks licensed nationwide.
Deciding on the right provider is not always easy. That’s why we recommend you take a look at our bitcoin broker & exchange comparison. Trade on the safest and best exchanges worldwide! To the comparison