According to a July 11 report from The Korean Economic Daily, the group’s banking unit, Woori Woori Financial Group has become the latest major South Korean financial institution to announce it will launch digital asset custody services.
Bank, is partnering with Bitcoin-based fintech solution firm, Coinplug, to establish a digital asset custody joint venture, dubbed D-Custody.
Coinplug will be D-Custody’s largest shareholder, followed by Woori Bank. The joint venture is expected to be incorporated in the coming weeks.
Existing Korean legislation maintains that domestic entities are not able to access the services of cryptocurrency exchanges, meaning the country’s banks can only enter the crypto market via joint ventures of share investments.
While local banks are prohibited from directly entering the digital asset custody market, an increasing number of major Korean financial institutions are setting up joint ventures with partial ownership to gain a foothold in the industry. A Woori Bank representative stated:
“In overseas markets, the digital asset custody has become a successful, established practice among the new services offered by the banks.”
As of August 2020, four of South Korea’s five largest banks had declared their intention to launch crypto custody services, including Kookmin Bank, Shinhan Bank, NH Nonghyup Bank, and Woori Bank.
Kookmin, the country’s largest financial institution, had filed for a trademark application for its custody service in March 2020, before establishing Korea Digital Asset Co. in partnership with venture fund Hashed and local blockchain service firm Haechi Labs in November.
In June 2020, Nonghyup Bank launched a blockchain financial services consortium in partnership with blockchain developer Hexlant, with the group announcing plans to launch a custody business alongside Korea Information & Communications Co.
In January 2021, Shinhan Bank announced it had made a strategic investment in the crypto custody consortium, Korea Digital Asset Trust, which is backed by major local exchange, Korbit.