The group of South Korean commercial banks that recently ruled out working with domestic crypto exchanges may be forced to rue their decisions after figures for the first quarter of the financial year revealed bumper commission earnings for the banks currently working with trading platforms.
Per data compiled by the office of the ruling Democratic Party lawmaker Kim Byung-wook and made public yesterday, a whopping USD 57.5bn worth of tokens and fiat have been transacted through banks in the form of bank deposits and withdrawals in Q1.
The figures, reported Maeil Kyungjae, also showed that K-Bank, which partners with the Upbit exchange, collected a cool USD 4.5m in fees in Q1 – up from just over USD 500,000 in the final quarter of FY2020. There were also big paydays for NongHyup (NH) Bank, which picked up over USD 1.5m in commission fees from its partners Bithumb and Coinone. Shinhan, which made just USD 14,388 from its partnership with Korbit in Q4 of FY2020, accumulated USD 130,400 in commission fees last quarter.
Although figures like these are still a drop in the bucket for the likes of NH and Shinhan Bank, making up less than 1% of their total profits for the quarter, the same is not true for the neobank K-Bank, which has seen new account holder figures skyrocket beyond its wildest dreams in recent months.
The latter is reportedly almost certain to renew its contract with Upbit later this summer – and has managed to boost its number of account holders due to what must be one of the most lucrative bank-crypto exchange partnerships in Asia.
Sources close to the South Korean banking industry have told Cryptonews.com that other neobanks also have their eye on the sector.
Their number could possibly include K-Bank’s biggest rival, the Kakao-run neobank Kakao Bank, while a conventional rival BNK Busan has also expressed an interest.
However, the Shinhan and NH rivals Woori, Kookmin (KB), and KEB Hana have ruled out the possibility of working with exchanges for the foreseeable future as exchanges scramble to seal deals before a government-imposed September 24 deadline.
Exchanges that fail to secure banking partnerships to provide real name- and social security number-authenticated accounts before the cutoff point will be ordered to close or face criminal prosecution.
Kim claimed that the numbers pointed to an “exponentially increase” in the size of the sector and said:
“[The government] must urgently create a domestic cryptoassets-related legal framework to protect investors from [crypto] fraud and hacking-related damage.”