Foreign media: South Korea's four top banks are considering offering cryptocurrency custody services in the next few months

Summary:

1. Four of the top five banks in South Korea will launch cryptocurrency custody services.

2. The move is ahead of the government’s legislation targeting digital currencies.

3. Banks say there is a surge in demand for alternative assets like Bitcoin.

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South Korea is rapidly developing in the institutional cryptocurrency space. Four of the country’s top banks are considering offering regulated cryptocurrency custody services in the coming months, according to local publication MTN.

Foreign media: The spread of the new crown virus has investors flocking to bitcoin ATMs: Live Bitcoin News published an article saying that as many people fear the spread of the new crown virus, some people are flocking to the bitcoin ATM machine closest to them, hoping to obtain digital currency. These currencies might increase their wealth, or keep them safe during times of economic turmoil. Bitcoin ATMs operate through QR codes and private keys, ensuring users’ identities and funds are protected, and their security protocols are stronger to prevent theft or malicious attacks. Bitcoin ATM operator Digital Mint has acknowledged a drop in usage over the past few weeks, but is still attracting a steady flow of new and existing customers. Another company, Liberty X, has also started expanding its network. In just over a month, the number of its ATMs went from zero to hundreds. [2020/4/21]

The South Korean banks said they were interested in cryptocurrencies for two reasons: increased client demand and diversification. The top five banks collectively manage over $1.2 trillion in assets, and four of them (Woori, Shinhan, Kookmin, and Nonghyup) are now targeting the cryptocurrency space.

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Shinhan and Woori announced their plans ahead of the release of South Korean government regulations targeting cryptocurrencies next year, the report said. On the list of legislation, it is proposed to tax cryptocurrency profits, report all transactions, and allow only licensed entities to operate and provide crypto services to customers.

NH Nonghyup Bank and Kookmin Bank have established blockchain “teams” to plan custody products. The report pointed out that the former even hopes to launch "advanced" features to attract wealthy people.

Shinhan had previously announced crypto custody services in 2017, when bitcoin prices in the country briefly hit $24,000, but the bank took no further action against the cryptocurrencies after receiving a legal notice.

Meanwhile, a South Korean economist said South Korea’s regulatory plans are “too little, too late” compared to what China and the U.S. are doing to regulate cryptocurrencies.

"Other countries are moving quickly in this regard. But South Korea still has no legal system, so progress has been slower than expected," said Park Sung-joon, head of Dongguk University's blockchain research center.

“I’m concerned about losing our competitiveness,” he said, adding that the support of “institutional investors” was essential before cryptocurrency regulation.

The South Korean government is raising the stakes when it comes to blockchain and digital currencies. The government has earmarked $400 million for research into distributed ledger systems in an attempt to emerge from the economic fallout of the COVID-19 pandemic.

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