By HVY Journalists: Kookmin Bank, the single largest financial institution in South Korea, is in the process of building a key infrastructure that may serve a broader market of investors in entering the crypto market in the medium to long term.
According to CoindeskKorea, a crypto publication operated by mainstream media outlet Hankyoreh, Kookmin Bank executive Heo In secured a strategic partnership with Atomrigs Lab to build a crypto custody platform.
Would improve the confidence of investors in crypto
In the coming months, Kookmin will leverage the technology of Atomrigs Lab and the bank’s internal infrastructure, management system, and information protection protocol to create a crypto custody platform for clients.
Local reports have said Kookmin is the first bank in South Korea to enter the crypto custody market and it is likely to have a significant impact on the landscape of the market.
“Until now, most crypto asset exchanges in the global market have directly held the funds of users but the concerns towards the possibility of hacking attacks and questionable practices of some exchanges have led investors to worry about the market. If a reputable bank with credibility begins a crypto custody business, it may eliminate some of the concerns of investors,” a local report translated by HVY read.
The bank said that the two companies will collaborate to explore the crypto asset market and find potential businesses to operate in the foreseeable future. Kookmin Bank executives emphasized that the institution will contribute towards improving the crypto ecosystem by strengthening the existing infrastructure.
Lee woo-yeol, the president of Kookmin Bank IT Group, said:
I hope Kookmin Bank and Atomrigs Lab continue to grow by creating innovative services and technologies in the crypto custody sector. Kookmin Bank will continue to work with a wide range of technology companies to expand the digital ecosystem.
Previously, in January 2018, due to pressure placed by regulators in South Korea, Kookmin Bank closed down the virtual accounts of crypto exchanges in a controversial decision, forcing banks to switch over to other major banks like Shinhan Bank and Nonghyup
At the time, Korbit, a top three exchange in South Korea, said:
As previously announced, in order to comply with the identification and anti-money laundering regulations being enforced by the government, the current KRW deposit method will be terminated by the end of January 2018.
To use the new KRW deposit method, which is slated to be implemented within this month, you must have a Shinhan Bank account registered under your legal name. Please use this time to create a banking account at Shinhan Bank. We will follow up with further instructions on how to input the new KRW withdrawal account information on Korbit.
The move towards crypto custody by Kookmin Bank demonstrates a drastic change in stance since January 2018.
Although the bank has demonstrated an interest in blockchain technology throughout the past two years, the shift of its stance towards crypto suggests that the regulatory environment in South Korea has improved in the last 15 months and that the demand for crypto has consistently increased.
Targeting accredited investors
As seen in the large inflow of capital from institutions and accredited investors in recent months, the overall improvement in the infrastructure supporting the asset class has led to a general increase in confidence from investors.
With some of the largest financial and technology conglomerates in the world in the likes of JPMorgan, Facebook, TD Ameritrade, Fidelity, and Nasdaq leading some sort of crypto initiatives with a long term outlook, Kookmin is preparing to serve the market.