In accordance with the report from the Korean Economic Daily, posted on the 11th of July, Woori, a South Korean financial institution, has formally revealed that it will be supporting custody services for crypto assets.
As mentioned in the report, Woori is joining hands with Fintech Solution company, Coinplug, which operates on the basis of Bitcoin, to bring about a new path that will allow the bank to enable crypto-based assets to be held in custody. This new venture is supposedly named as D-Custody. Regarding the deal with Woori, Coinplug will be the biggest shareholder in the project with Woori behind. This project is expected to go live in the coming few weeks.
According to Korean Law and Legislation, local entities are unable to gain a connection to the crypto market, so Banks who are willing to connect to the crypto market are only able to access it unless and until they have some sort of partnership that involves shared investments.
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Because local banks are banned from directly accessing the crypto market, a growing number of banks have started to get into partnerships and joint ventures in order to gain indirect access to the cryptocurrency space through asset custody services, meaning that the banks can comply with the regulations and also have access to the crypto space at the same time. An official from the Woori Bank said that if we look at the international market, digital asset custody services have become a very popular feature to integrate.
Banks Adopting Custody Services
Coming from 2020, four out of the five biggest South Korean Banks have been indicating that they are also interested in providing cryptocurrency-based asset custody services to get a taste of the crypto market. The Kookmin Bank of South Korea has already submitted documentation in March of 2020 regarding its own application to support custody services. The Bank then formed the Korea Digital Asset Corporation in November of the same year, with fund company Hashed and blockchain company Haechi Labs being partners.
Likewise, in June of last year, the Nonghyup Bank enabled a blockchain-based association, partnering up with Hexiant to bring blockchain services as well as an asset custody service with Korean information and Communications Co. The Shinhan Bank also contributed investments into a crypto custody association in January of this year.