Top South Korean Banks Accelerate Efforts To Offer Crypto Services Ahead of Regulatory Reforms

The leading banks in South Korea are reportedly accelerating their plans to provide crypto and stablecoin services in anticipation of new regulations. The accelerating effort from banks follows a shift in national sentiment towards crypto under the recently elected President Lee Jae-myung.

South Korean Banks Prepare for a Shift in Regulatory Approach

Although banks in South Korea like Shinhan and Woori, had intentions to start providing crypto-related services as early as 2018-2019, they had to put those plans on hold. 

Under the administration of the former South Korean president, Moon Jae-in, the country banned initial coin offerings (ICOs), which stifled the growth of cryptocurrency in the country. But with a new president, Lee Jae-myung, who has assumed a pro-crypto stance, banks are already gearing up to work within a crypto-friendly environment.

The government of Lee has promised to provide a transparent legal infrastructure for digital assets, such as stablecoins and crypto exchanges run by traditional banks. A number of pro-industry reforms are on the table of several committees of the National Assembly. Already, there are talks of the legalization of stablecoins in the country.

Banks Take Proactive Measures in Anticipation of Crypto Legislation

Local reports state that leading banks in South Korea are making proactive moves to ensure they are ready for the change in how cryptocurrencies are regulated. 

Maeil Kyungjae has reported that banks are actively preparing by establishing dedicated internal organizations and forming consortia for future issuance. Below are some of the moves made by major banks:

Woori Bank

According to the local media, Woori has created a dedicated Digital Asset Team that will focus on different types of businesses linked to digital assets, such as stablecoins and digital wallets.

Woori Bank is also considering reviving its plan to provide crypto custody after contracting a business through a blockchain startup. It has also developed a stablecoin group with other unidentified businesses, Maeil Kyungjae reported.

Kookmin Bank (KB)

KB had already established a Digital Asset Response Council in June. It desires to build a system-wide, group response that encompasses its broad base of KB Financial Group establishments.

The bank is also assessing opportunities of working together with the external partners (insurance companies, credit card issuers, securities companies and asset management companies) to offer crypto services.

KEB Hana Bank

KEB Hana Bank has already established a crypto working group with corresponding departmental staff members within all its affiliates. The group is thought to be coming up with issues concerning WON stablecoins. It is also examining the infrastructure demands for future crypto projects.

In addition, banks have also sought a variety of trademarks related to crypto and stablecoins. Kookmin Bank (KB), as an example, has filed 32 won-pegged stablecoin-related trademarks and 49 foreign-currency stablecoin-related trademarks. Even smaller institutions like K Bank and Busan Bank are getting ready, both establishing crypto task forces.

Why This Matters?

According to the local publication, South Korean banks believe that the legalization of stablecoins will require financial firms to quickly launch related services to secure a lead in the crypto market. So, while implementation of the legislation may take time, it's important for them to act now to secure a leading position in the market.

South Korea has one of the most vibrant crypto trading markets in the world. Like in other countries, with the legalization of stablecoins and crypto-friendly regulations, there will be a massive increase in the demand for digital assets and related services. These proactive steps position these top banks to meet this demand and emerge as industry leaders in the country.