Woori Financial Group, one of the largest banks in South Korea, is entering the digital asset custody service (DACS) market. It became the third largest bank in South Korea after KB Financial Group and Shinhan Financial Group to do so.
Woori Bank decided to have a joint venture with Coinplug Inc., bitcoin-based fintech solutions provider, according to a report by Korean Economic daily. Coinplug is the largest shareholder in the joint venture with Woori Bank.
Digital Asset Custody is a service that stores and manages digital assets like cryptocurrency possessed by various organizations. Banking groups like KB Financial Group, Shinhan Financial Group and Woori Financial Group have become Korea’s major banking groups to allow Digital Asset Custody Services (DACS).
KB Kookmin Bank, South Korea’s largest bank, entered the DACS market by inaugurating Korea Digital Asset Co. (KODA) last November with Haechi Labs and Hashed (a blockchain-oriented venture fund). NH Bank, another major bank, has announced plans to start its digital asset businesses with Korean Information & Communications Co. and Hexlant Inc. (a blockchain company developing digital wallet technologies).
Although nations like Japan, Switzerland are offering DACS directly to organizations in need, Korea still does not allow cryptocurrency exchanges. Various other modes by which companies across Korea retain their cryptocurrencies in their storage devices like USBs. Also, current laws in Korea prohibit the banks from direct entry in DACS.
Banking experts in Korea emphasized that the DACS market is at lower risk as compared to cryptocurrency trading. The DACS market can add a fixed revenue to the banks. Experts also suggested that DACS is like traditional bankings.