South Korea’s major cryptocurrency exchanges are ready to renew their banking agreements, a sign that the relationships between the big four platforms and the traditional financial sector remain strong.
According to Business PostBithumb is close to reaching an agreement with NongHyup Bank (NH Bank). This agreement will allow the two parties to work together for at least another year..
The existing partnership agreement between Bithumb and NH Bank comes to an end on March 24, 2023. But the renewal process now seems like a formality. The crypto exchange said that the renewal agreement was now “in its final stages”.
Bithumb and NH said they have “strengthened anti-money laundering systems” and “provided stable services” since the beginning of their collaboration. The parties started working together five years ago. A Bithumb spokesperson said:
“We will finalize the renewal of our agreement next week. And we will continue to do our best to create an environment where clients can trade safely and with ease.”
Are other South Korean crypto exchanges ready to renew their banking agreements?
This decision will be welcome for the country’s major banks, which risked being shut out of the cryptocurrency market by the new neobanks supported by IT companies.
Last year, Coinone, one of the big four exchange banks, turned its back on NH Bank in favor of an agreement with the neobank Kakao Bank, supported by Kakao. Kakao is a tech giant who is best known in South Korea for creating the KakaoTalk chat app.
Upbit, the market-leading crypto exchange, has seen a huge surge in popularity since partnering with Kakao Bank’s rival neobank, K Bank. According Blockchain Todaythe latter’s earnings soared more than 270% year-over-year in fiscal 2022, driven primarily by its partnership with Upbit.
Rather than requiring customers to visit physical offices to create accounts linked to crypto exchanges, K Bank allows new customers to open accounts through its mobile application.
Coinone et Kakao Bank hope their partnership will yield similar results. This month, K Bank said it wanted 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 entered into an investment agreement that left it a minority stake in the exchange.
Operator Upbit Dunamu has called on the government to allow more growth in the cryptocurrency sector by lifting the ban on initial exchange offerings (IEOs).
Recall that all forms of token issuance were made illegal in South Korea in 2018. The media Chosun Ilbo reported that Dumanu CEO Lee Seok-woo said that the legalization of IEOs would promote “digital financial innovation” in the crypto sector at the national level.
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