South Korean banks may be really bullish on cryptocurrencies. Why? Because they have over $2 billion dollars’ worth in cryptocurrencies. This is a very interesting number compared to the largest crypto exchanges in the country, which had over $6 billion dollars in user funds.
Cryptocurrency Adoption in South Korea
It seems that due to the bear market that we are experiencing since the beginning of the year, Bithumb is now holding over $1 billion dollars, compared to the $6 billion dollars it had in the past. Regulated banks in South Korea only have 8% of their assets in cryptos, but the percentage is growing as the space is being considered as an emerging asset class.
Banks have decided to participate in the market, they have some funds in virtual currencies but they are careful of having a large number that could hurt the financial system in the Asian country. But even when these are just small portfolios for these institutions, it is surprising to see that regulated banks are the largest stakeholders in South Korea.
And it is also important to mention that financial institutions in the country are not only investing in cryptocurrencies but also in products and services for other companies, individuals and interested parties. Shinhan, the second largest bank in Korea, developed a Bitcoin vault for customers. At the same time, they decided to partners with one of the most important networks in the market, Ripple, to use blockchain technology and improve its services.
Shinhan explained in a press release:
“[We are] testing a virtual bitcoin vault platform wherein the private keys of bitcoin addresses and wallets are managed and issued by the bank. The bank intends to provide the vault service for free and charge a fee for withdrawals.”
This tendency shows that traditional financial institutions are interested in the crypto market. At the same time, it shows that they are able to benefit and profit from it. In the future, more banks and other important institutions may be ready to operate with virtual currencies and participate more actively in this market.
ICOs Legal Again?
Back in 2017, South Korea decided to ban Initial Coin Offerings. Now, the country is working in order to re-legalize ICOs. The information was first reported in May the 29th by a local news source that cited government officials.
“We need to form a task force including private experts in order to improve transparency of cryptocurrency trading and establish a healthy trade order,” says the publication.
During the last months, different scams have been appearing in the market. Companies decided to get fundraised but some of them were totally scams and disappeared with the funds of the users. After it, several countries, including China and South Korea, decided to ban all the activities related to them.