Woori Financial Group, one of the largest financial conglomerates in South Korea, will offer crypto custody services. The bank will develop a joint venture with Coinplug, a blockchain-based development company. This conglomerate signals the third bank to come onto the market in the country, after KB Kookmin Bank and Shinhan Bank.
Woori Financial develops joint ventures to offer custody services
Woori Financial Group, one of the largest banks in South Korea, will soon offer cryptocurrency custody services. According to reports from Korea Economic Daily, Woori will set up a joint venture with Coinplug, a blockchain solution development company with more than 300 blockchain patents.
While South Koreans have traditionally been attracted to cryptocurrency, their regulatory framework prohibits them from relying on exchanges for custody. This has sparked the interest of banks in intensifying and including the custody of cryptocurrencies in their services. However, from a legal point of view, banks cannot offer these services independently and have to enter the market through joint ventures.
Still, banks are well positioned to be the top crypto custodian providers in the country. Banking institutions are generally highly trusted in the country, and crypto is an established industry. A Woori official said:
In overseas markets, digital asset custody has become a successful and established practice among the new banking services.
Banks are offering crypto custody as a new source of income
With Woori’s move, all three major banks in the country now offer crypto custody services. The country’s largest banking conglomerate, KB Kookmin Bank, was the first to enter the room. It formed a joint venture, Korea Digital Asset Co. (KODA), with other blockchain-related companies in November 2020.
The second Korean bank to dive into the new field was Shinhan Bank. Shinhan Bank entered into a joint venture with Korbit this year to establish its own custody service called Korea Digital Asset Custody Co. Custody is more like the traditional services banks offer for fiat currencies, another relatively stable source of income.
South Korean regulators have taken a tough stance on crypto and proposed new regulations that could seriously affect cryptocurrency exchanges in the country. They also banned police officers from buying cryptocurrencies in May.
What do you think of Woori Financial entering the cryptocurrency custody business? Let us know in the comments section below.
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