Banks and cryptocurrencies were worlds apart just a few years back. Now several banks are venturing into the crypto industry and have started offering services related to it. Lately, there has been an influx of banks across the world starting to offer custodial services for digital assets, and the KB Kookmin Bank of South Korea is ready to step in.
KB Kookmin Bank, the largest banks in South Korea, has 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 entities involved in the partnership claim that the move to venture in the crypto custody business was the result of regulatory changes that encouraged them to consider different business models like the one’s involving blockchain tech.
Furthermore, with nations like China and Japan onboard the global arms race for central bank digital currency, financial institutions are experiencing growing demand to gain exposure in blockchain-based financial assets and services.
Simon Kim, CEO of the Seoul and San Francisco-based firm, Hashed, stated in a post on medium:
“Combining our insight in the blockchain industry and providing both technical and commercial consultations will inevitably open new doors to consumers as well as to the country in ushering the new era of digital transformation.”
Early start for KB Kookmin Bank
Last year, the bank partnered with Atomrigs Labs to develop the said crypto custody service, by developing a product that secures cryptocurrencies using multi-party computation (MPC) cryptography technology.
The platform generated random keys instead of a unique private key, to enhance security.
Later in January 2020, the bank filed a trademark application for “KBDAC” – KB Digital Asset Custody – with the Korean Intellectual Property Office.
Back then, an official of KB Kookmin Bank told local news outlet Digital Today, that the KBDAC is similar to what the bank was doing with blockchain startup Atomrigs Lab, but refused to comment on the specific launch date.
South Korean banks are rapidly opening up to blockchain and cryptocurrencies, as the news comes months after one of the bank’s major rivals, NongHyup, or NH Bank, announced its plans to launch crypto custodial services as well.
However, NH Bank’s proposed platform will reportedly focus on institutional investors only.