On July 9th, Yonhap News Agency reported that South Korean commercial banks hold cryptocurrencies such as Bitcoin and Ethereum, which are worth nearly US$2 billion.
Holding more than Korea’s largest cryptocurrency exchange
Although the digital assets held by Korean regulated financial institutions account for only 8% of the total assets of its brokerage business, according to local media reports, as an emerging asset class, cryptocurrency has occupied a part of the assets held by Korean commercial banks. :
Compared with the stock market, the investment scale of cryptocurrency is not large, and we expect cryptocurrency production to have limited impact on the Korean financial market.
According to reports, in April 2018, Bithumb, Korea’s largest cryptocurrency exchange, held more than $6 billion in cryptocurrency user funds. Although the data is estimated at $900 billion in the cryptocurrency market and bitcoin is at an all-time high above $20,000.
As a company listed on the Korean stock market, the local government asked Bithumb to disclose their holdings and income to investors on the open market.
Given the significant decline in the valuation of major digital assets since December 2017, Bitumum’s holdings may now be around $1 billion.
As of July this year, South Korean commercial banks held more digital assets than Bitumum, the country’s largest cryptographic currency code exchange.
Although the commercial assets held by Korean commercial banks are much lower than the traditional assets such as bonds and stocks held by them, the fact that commercial banks are still the largest holders of cryptocurrency in the country is very important, especially for the fact that they are still in their infancy. The field of cryptocurrency that grows exponentially.
Compared with other countries, Korean banks are more enthusiastic about cryptocurrencies.
Korean commercial banks are generally more enthusiastic about cryptocurrency and blockchain technology than banks in other regions.
For example, Shinhan Bank, Korea’s second-largest bank, has been developing bitcoin wallets for customers and the traditional financial industry. The bank also collaborated on blockchain projects such as Ruibo to develop commercial applications of the technology.
Shinhan Bank said in December 2017:
We are testing a virtual Bitcoin vault platform where the bitcoin address and the private key of the wallet are managed and issued by the bank. The bank intends to provide vault services free of charge and to collect withdrawal fees.
At present, it is difficult to determine the motive behind the holding of digital assets by large Korean commercial banks. Whether it is a long-term investment or a cryptocurrency exchange, it is not clear at present.
Recently, the South Korean government is drafting a draft of the latest industry classification standards for the blockchain sector in the country. The legal status of the cryptocurrency industry and exchanges will be officially recognized by the government at the end of the month.