S Korean Crypto Exchanges to Renew Banking Agreements
South Korea’s leading crypto exchanges are set to renew their banking agreements – in a sign that the relationship between the “big four” trading platforms and the traditional financial sector remains strong.
Per Business Post, Bithumb is close to entering into an agreement with NongHyup Bank (NH Bank). The agreement which will see the two parties work together for at least one more year.
Bithumb’s existing NH partnership agreement is set to expire on 24 March. But the renewal process now appears to be a formality. The crypto exchange said the renewal agreement was now “in its final phase”.
Bithumb and NH said they had “strengthened anti-money laundering systems” and “delivered stable services” since they first started working together. The parties first started working together five years ago. A spokesperson for Bithumb stated:
“We will complete the renewal of our real name accounting agreement with Nonghyup next week. And we will continue to do our best to create an environment where customers can shop safely and easily.”
More South Korean Crypto Exchanges Ready to Renew Their Banking Agreements?
The move will come as a welcome tonic for the country’s larger, older banks – which have risked being frozen out of the crypto scene by newer, IT firm-backed neobanks.
Last year, fellow “big four” exchange Coinone turned its back on NH Bank in favor of a deal with Kakao-backed neobank Kakao Bank. Kakao is a tech giant best known in South Korea for creating the chat app KakaoTalk.
Upbit, the market-leading crypto exchange, has seen a huge surge in popularity since partnering with Kakao Bank neobank rival K Bank. Per Blockchain Today, the latter’s profits rose over 270% year-on-year in FY2022, largely thanks to the Upbit partnership.
Instead of requiring customers to visit brick-and-mortar offices to set up accounts linked to crypto exchanges, K Bank allows new customers to open accounts via its mobile app.
Coinone and Kakao Bank hope that their partnership will yield similar results.
K Bank announced this month that it was shutting down its PC services, claiming that few customers were using them. The bank stated that it wanted to focus on its mobile services.
NH Bank rival Shinhan Bank is unlikely to deviate from its own partnership agreement with the Korbit exchange. Last year, the bank agreed on an investment agreement that gave it a minority stake in the trading platform.
Meanwhile, Upbit operator Dunamu has called on the government to enable greater growth in the crypto sector by lifting the ban on initial exchange offerings (IEOs).
All forms of token issuance were made illegal in South Korea in 2018. But Chosun Ilbo reported, Dumanu CEO Lee Seok-woo stated that IEO legalization would promote “digital financial innovation” in the domestic crypto sector.
