South Korean Banks Are Starting to Offer Crypto Services

The last decade has been turbulent in the world economics. With the rise of blockchain technology and booming interest in crypto services, lots of government and non-government financial institutions started to integrate digital currency services into their systems. This is even more clearly visible in South Korea where two more of the top five banks have added such services into their ranks putting.

South Korea’s Woori and Shinhan banks have just announced that they are going to be introducing crypto-asset services to their customers. These are not the first banks to do so as there are 2 other predecessors that have already achieved this goal putting a total of 4 out of 5 top banks in South Korea integrating such services. These banks combined are holding as much as $1.2 trillion in assets alone.

Each of these banks has come out stating that they want to offer services to clients who want to manage and hold their cryptocurrencies. The decision came forward after the amendment to the Special Financial Transactions Information Act that changes legislation concerning crypto assets. The amendment is going to come into effect starting from 2021.

Banks are Interested

This news is not something out of the ordinary for the South Korean population. For example, Shihan bank has already come out stating that they wanted to add such functionalities back in 2017 but these plans were counteracted by the government in January 2018 causing the idea to be shelved. At this time the NH Nonghyup Bank and Kookmin Bank already coordinated their efforts and created crypto custodial features with the former being at the forefront of the development already launching services for institutional investors in the coming months. This is a great addition to the services due to the fact that banks can then move into more complex matters like helping to create more safe and high-tech exchanges. The idea is that forex fundamental analysis tips can be applied to cryptocurrencies as well to some extent. The foreign exchange market is something banks are very knowledgeable about since before it was accessible to us through internet banks were doing it for a century. This creates a strong belief in the possibility of augmentation of already existing services and the addition of new, modern, and well-funded functions to improve the quality of life for the individuals utilizing these services.

When the cryptocurrency was still in its infancy no serious expert believed that it would make past a couple of headlines. Although once the success of bitcoin (BTC) was already clearly visible a lot of other cryptos started popping up. It is only natural that banks would take an interest in the development of such systems. The idea is quite simple considering the fact that banks are an obvious institution to take an interest in such affairs. Blockchain technology is full of beautiful new ideas, however, not all of them are seeing the best integration due to the lack of resources. Or at least this was true until bigger financial institutions started making their way into the blockchain business. With banks, we can expect the system to be that much more optimized and the security risks to be taken down to a minimum as well as some type of insurance.

Late Arrivals

A lot of experts are agreeing on the fact that South Korean banks are a bit late to the party. A lot of financial institutions across the world have already been providing such functions. Blockchain experts in the country have been very vocal about this fact bringing in the argument that Americans are quite ahead of the South Korean banking sector. Even smaller underdeveloped countries like the Republic of Georgia have banks that have integrated these functions into their services as long as 4 years ago with Liberty Bank utilizing their digital wallet service eMoney to give the possibility to trade cryptocurrencies and store them in the customer’s bank account.

What drags South Korean banking back is the lack of government initiative. Although there are some developments it is still not considered enough. The head of Blockchain Research Center at Dongguk University Park Sung-Joon has stated his concerns that national financial competitiveness can be put under jeopardy due to the fact that there is no legal system in place in South Korea and subsequently the process is terribly slow. He has also integrated that without strong institutional support from the government the integration may not be as widespread as people want it to be.

South Korea and Crypto

It is easy to conclude that due to the slow integration of blockchain technology from the finance sector South Korea wouldn’t have developed in this field elsewhere as well, right? Well, not entirely. In reality, people of South Korea love blockchain technology. A lot of sectors other than financial ones have been working tirelessly on enhancing their products. For example, as many as 1 million people have already received their new blockchain-based digital driver’s license after only 3 months of development. The country’s highways are also going to be seeing new system integration due to the efforts of KEB Hana Bank, which has partnered with Korea Expressway Corporation and started working on implementation of a blockchain-based toll system for highways in the republic.

Seongnam’s payment program is also going to be expanding via addition of new digital gift certificates. At the same time, people who want to travel to the beach in Busan will have the option to pay with either BTC or Ethereum (ETH).