South Korea has always been at the forefront of implementing cryptocurrencies and blockchain technology. The nation is now picking up pace in the institutional crypto space as four of the nation’s top banks are now pondering over the idea of offering regulated custody services for cryptocurrencies.
According to a recent report published by Korean news outlet MTN, Korean banks cited that increased customer demand and the need to diversify offerings are the core motives fuelling the move to introduce cryptocurrency-based services.
The top five banks in South Korea combined, have more than $1.2 trillion worth of assets under management. Four of these banks, namely Woori, Shinhan, Kookmin, and Nonghyup are amidst plans to enter the crypto space.
The new law would seek to tax crypto profits, report all related transactions, and allow only licensed entities to operate and provide crypto services for clients.
NH Nonghyup Bank was the first to announce plans to offer crypto custody recently signed a memorandum of understanding with law firm Bae, Kim & Lee and Hexlant, a blockchain technology laboratory, to launch a joint institution for the research and development of cryptocurrency exchanges.
KB Kookmin Bank recently partnered with Seoul based blockchain venture fund Hashed, and local crypto exchange Cumberland Korea, to develop “strategic technology cooperation” that’d allow the custody of digital assets like Bitcoin and Ethereum.
The bank had already applied filed a trademark application for “KBDAC” – KB Digital Asset Custody – with the Korean Intellectual Property Office earlier this year.
The report quoted Park Sung-joon, head of the Blockchain Research Center at Dongguk University – and one of the nation’s leading blockchain specialists, who stated:
“Other countries are moving very quickly in this regard. But there is still no legal system in place in South Korea, so progress is slower than expected.”
“I am worried about losing [our] competitiveness,” Park said, adding that support from “institutional investors” was a necessary feature ahead of crypto regulations.
South Korea has been betting big on blockchain tech and cryptocurrencies. As The Daily Chain reported, the nation recently revealed its plans to enable blockchain-powered tolls, while the nation’s popular tourist beaches are set to be powered by cryptocurrency payments.