Leaders of the top banking institutions in South Korea urged the country's ruling party lawmakers to ease regulations hindering collaboration with cryptocurrency exchanges.
The representatives of South Korea's five major commercial banks — KB Kookmin, Shinhan, Hana, Woori and NH Nonghyup — along with executives from regional Jeonbuk Bank and internet-based Toss Bank, gathered Wednesday to deliver such recommendations to lawmakers from the ruling People Power Party, local news outlet Money Today reported.
In particular, Woori Bank President Jung Jin-wan requested that local crypto exchanges be allowed to partner with more than one bank, citing current risk to systemic stability.
South Korea mandates local exchanges to obtain banking partnerships for them to provide fiat-to-crypto services, for anti-money laundering purposes. Users are required to register their real-name bank accounts with crypto trading platforms to unlock cash deposit and withdrawal services.
The exclusive partnership model mandated by current regulations, linking one exchange to one bank, has favored some institutions.
According to Maeil Business News, South Korean neobank K-Bank saw its user base triple in a single year — from 2.19 million to 6.6 million — after it secured a partnership with Upbit in 2020. As of late 2024, the bank had 12.7 million users, the report said.
"Considering there are limitations on consumer choice and institutional clients, please expand [the regulation] to one exchange to multiple banks," Woori's Jung said during the Wednesday meeting, according to the local news report.
Meanwhile, South Korean banks and exchanges are preparing to welcome institutional clients, as regulators are gradually lifting the ban on institutional investment in crypto. Upbit is currently receiving inquiries from corporations looking to open accounts, while Korbit has launched a service to manage institutional crypto holdings, Newsis reported.
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