South Korean Banks Embrace Cryptocurrency
Several major banks in South Korea are actively working on strategies to incorporate cryptocurrencies and stablecoins into their services as they anticipate forthcoming regulatory changes. Reports from the prominent business newspaper, Maeil Kyungjae, indicate that these financial institutions are not only establishing specialized divisions for cryptocurrency initiatives but are also forming alliances to quickly advance into this emerging sector.
Historical Context and Political Changes
Historically, banks like Shinhan and Woori had ambitions to delve into cryptocurrency activities as far back as 2018 and 2019, but their plans were hampered by the Moon Jae-in administration’s harsh stance against initial coin offerings, which considerably curtailed the growth of the crypto market during his tenure. With the recent election of President Lee Jae-myung in June, who has voiced strong support for cryptocurrencies, there is a palpable sense of optimism among industry stakeholders.
Bank Initiatives and Collaborations
Aware of the shifting political landscape, South Korean banks are stepping up their efforts. Woori Bank has set up a Digital Asset Team committed to exploring diverse avenues in the digital asset space, including initiatives centered around stablecoins and digital wallets. This specialized group, made up of nine members, operates under Woori’s New Business Alliance Platform.
Moreover, Woori has entered into a partnership with a blockchain startup to advance its earlier plans for crypto custody services and is actively forming a consortium focused on stablecoin development, as reported by Maeil Kyungjae.
Kookmin Bank (KB) has also taken significant steps by inaugurating a Digital Asset Response Council in June. This council’s mission is to devise a comprehensive approach that encompasses all its subsidiary companies within the KB Financial Group, including crafting potential responses to future regulatory changes. The council is exploring partnerships with various sectors, such as insurance, credit card companies, securities firms, and asset management entities, to enhance strategic cooperation in the digital currency arena.
Similarly, KEB Hana Bank is conducting groundwork with a dedicated working group on cryptocurrencies involving members from its multiple units, focusing on the development of won-pegged stablecoin frameworks and the necessary infrastructure for upcoming projects. KEB Hana is also collaborating on a joint venture aimed at creating a crypto custody service while exploring international markets.
Shinhan Bank has mobilized a task force consisting of approximately 20 employees to push forward its crypto initiatives. Various banks are also taking proactive steps to secure trademarks related to cryptocurrencies; for instance, KB has filed for 32 trademarks concerning won-backed stablecoins and another 49 for foreign currency equivalents. Additionally, other institutions, including K Bank, a partner of the Upbit exchange, and regional players like Busan Bank, are establishing blockchain-focused teams to capitalize on potential regulatory changes.
Conclusion
As South Korean banks rally to prepare for the approval of stablecoins, an anonymous official from the banking sector confirmed that swift action to launch related services will be crucial for these institutions to gain a competitive edge in the market.
