South Korea: What Happens When Banks Are Forbidden From Directly Entering Digital Asset Custody Services Market?
16 Jul 2021 — South Korea: What happens when its regulation is against traditional banks from providing their customers access to the crypto market?
According to the latest report from The Korean Economic Daily, the country currently doesn’t allow domestic entities to use services provided by cryptocurrency exchanges. Thus, the companies and organisations in Korea must keep their cryptocurrencies in their own storage drives such as USBs, meaning a high risk of theft or loss.
What’s more, under Korea’s current laws, banks are forbidden from directly entering the Digital Asset Custody Services market. With South Korea crypto market estimated at 10% of all global transactions, Korean banks are setting up joint ventures with FInTechs in the form of digital asset custody services, to continue to offer crypto services to their customers.
Last Sunday, Woori Financial Group — one of South Korea’s largest banking companies — announced its foray into the digital asset custody services market. It’s partnering with Bitcoin-based FinTech solution company, Coinplug, Inc. to establish a digital asset custody joint venture named D-Custody. The announcement marks South Korea’s fourth significant bank to enter the crypto space, after Kookmin Bank, NH Nonghyup Bank, and Shinhan Financial Group.
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These independent custodians provide solutions that are designed for institutional investors, with institutional grade security and insurance. They have the most secured digital assets custody solutions available, especially for those that are licensed and regulated.
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