- Shinhan Bank has made history as the first bank in South Korea to offer real-name cash-to-crypto trading accounts for institutions.
- The bank will undertake the move in partnership with Korbit, a licensed exchange in the country.
Shinhan Bank of South Korea has become the very first local financial institution to issue cryptocurrency-related accounts. It is also the first to make such a venture following the implementation of the Reporting and Use of Certain Financial Transaction Information Act. The latter is a law that extended anti-money laundering and counter-terrorism financing (AML/CTF) regulations to virtual asset service providers.
At the beginning of the month, the Korea Federation of Banks (KFB) pursued a similar move. The organization sought approval from the incoming administration to provide crypto services, including crypto trading, e-wallets, and custody services. All these were endeavors the former government strongly opposed. That government even stated that members of Generation Z and millennials are in a debt crisis because they trade cryptocurrencies. Corporations during the former regime had to find indirect ways of investing in digital assets.
However, now that South Korea has made crypto proponent Yoon Suk Yeol its president, pro-crypto policies are likely to flow.
South Korean bank offers institutions crypto trading accounts
Shinhan bank will be undertaking the project in partnership with crypto exchange platform Korbit. Only licensed and bank-partnered exchanges are allowed to provide cash-to-crypto services in South Korea, Korbit being one of them.
Businesses whose corporate accounts are registered with the bank can now direct funds to the crypto trading accounts it provides. Other organizations can therefore track money movements, effectively countering money laundering. Shinhan-backed Korea Digital Asset Custody (KDAC) members are some of the account holders receiving crypto accounts on a trial basis. KDAC will also be providing crypto custody services to institutions, thereby alleviating money laundering concerns for the bank.
Crypto comes to institutions
Of note, the move by the bank encourages traditional institutions in South Korea to openly venture into cryptocurrencies. The Korea Blockchain Industry Association welcomed the move, saying South Korean companies need to follow global trends in virtual assets. However, one industry source countered the action, saying the financial transaction information act forbids it.
Nevertheless, other cryptocurrency exchanges in South Korea are likely to imitate Korbit, including UPbit and Bithumb. Already, the two are currently working on projects jointly with K Bank and NH Bank, respectively. Other banks in the country act as financial service partners to crypto exchanges or investors of custody services. As per Yahoo Finance, South Korea has 4,426 corporate investors trading in crypto-to-crypto exchanges. According to the Financial Services Commission, these investors acquired their digital assets overseas or through peer-to-peer (P2P) trading platforms.
Aside from that, South Korea is responding quite positively to the metaverse, having invested $187 million in a national project.
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