Not Wanting To Be Left Behind, Woori Korea Bank Launches Digital Asset Storage

Bank Woori Korea, is now starting to enter the digital asset business. (photo: pulse news korea)

JAKARTA - According to a report by The Korean Economic Daily, on Sunday, July 11, the group's banking unit, Woori, Woori Financial Group has become a major financial institution in South Korea which announced it will launch a digital asset storage service.

The bank, which partners with Bitcoin-based fintech solutions company Coinplug, will set up a digital asset storage joint venture, dubbed D-Custody.

Coinplug will be the largest shareholder of D-Custody, followed by Woori Bank. The joint venture is expected to be included in the coming weeks.

Applicable Korean law states that domestic entities cannot access cryptocurrency exchange services, meaning state banks can only enter the crypto market through stock investment joint ventures.

While local banks are prohibited from entering the digital asset storage market directly, more and more major Korean financial institutions are setting up joint ventures with partial ownership to gain a foothold in the industry.

“In overseas markets, digital asset storage has become a successful and well-established practice among the new services offered by banks,” said a Woori Bank representative.

As of August 2020, four of South Korea's five largest banks have declared their intention to launch crypto storage services, including Kookmin Bank, Shinhan Bank, NH Nonghyup Bank, and Woori Bank.

Kookmin, the country's largest financial institution, had filed a trademark application for its depository service in March 2020, before establishing Korea Digital Asset Co. They partnered with venture fund Hashed and local blockchain services firm Haechi Labs in November 2020.

In June 2020, Nonghyup Bank launched a blockchain financial services consortium in partnership with blockchain developer Hexlant. The group also announced plans to launch a custodial business with Korea Information & Communications Co.

In January 2021, Shinhan Bank also announced that it had made a strategic investment in a crypto storage consortium, the Korea Digital Asset Trust, backed by major local exchange, Korbit.

This trend is further strengthened if South Korean banks currently want to be more intensely involved in crypto trading.