South Korean Banks Earned USD 31M in Crypto Transaction Charges This Past Year

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Three South Korean banks earned USD 31.2m using their crypto exchange partnership deals with 2021, new data has revealed – suggesting that partnering with buying and selling platforms might be having to pay off for that frequently-careful domestic banking sector.

South Korean law requires crypto exchanges who offer fiat KRW buying and selling pairs to work with banks, who must provide platforms with fiat on/off ramps. They have to also absorb the possibility money washing risks involved – just like any breach in connection with this is counted like a black mark from the bank.

However, an enormous uptick in crypto buying and selling early this past year saw buying and selling volumes skyrocket of all major platforms. As crypto clients are legally obliged to carry real name-verified accounts in their exchange of choice’s partner bank, it has also driven up customer account opening figures for those three banks.

The success continues to be almost overwhelming for that market leader Upbit and it is partner bank, the neobank K-Bank. Upbit’s operator Dunamu continues to be formally considered conglomerate-sized company through the markets regulator – the very first crypto firm in america to become considered such. Conglomerates in Columbia are susceptible to some restrictive rules.

For K-Bank, the Upbit partnership introduced in USD 22.76m this past year, per data published by the regulatory Financial Supervisory Service through the MP Yoon Chang-hyeon, part of the nation’s Assembly’s Political Matters Committee – and reported by MBC.

The figure represents an x30 rise from 2020, when K-Bank made approximately USD 750,000 from the Upbit-related business.

The surge caused major disruption for that bank in the height of the very most recent crypto hurry in Columbia, using the bank tossed from kilter by having an “emergency in managing K-Bank’s loan-to-deposit ratio” in April this past year. Therefore caused Upbit to temporarily freeze withdrawals and deposits because it anxiously waited for K-Bank to solve the problem.

The earnings comes almost entirely from fiat deposit and withdrawal charges, which banks charge every time an exchange customer constitutes a fiat transaction.

Bithumb’s cope with NH Bank, meanwhile, earned the second some USD 6m in 2021, as the same bank also earned over USD 2m from the Coinone partnership. Shinhan Bank – which now part-owns the Korbit exchange – made USD 660,000 from partnering using the crypto platform in 2021.

As reported, the K-Bank rival Kakao Bank is allegedly deep in talks with Coinone more than a deal that may begin to see the latter dump its current partner – NH – in support of a brand new cope with the Kakao Group subsidiary.

A current deal between your newer regional bank Jeonbuk Bank and also the smaller sized crypto exchange Gopax has additionally opened up the doorway for several smaller sized banking players to participate the fray, hopeful that in so doing they can generate new revenue streams and grow their subscriber base.

People of recent President Yoon Suk-yeol’s political team have formerly mentioned they be prepared to issue regulatory approval for 2 or 3 more crypto exchanges prior to the finish of the year, meaning more banks could be required to work with the platforms.
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