Kakao Bank, the biggest neobank in South Korea and an offshoot of the internet giant Kakao, has confirmed it has sealed a partnership deal that will see it provide real-name banking services for customers of the crypto exchange Coinone.
The deal finally puts an end to months of speculation surrounding the deal. It also sees a second neobank enter the space – following the success of its rival K-Bank’s own partnership with the Coinone rival Upbit.
K-Bank, which was created by the KT Corporation business empire, has seen account numbers balloon as a result of its Upbit deal, which requires all Upbit users to conduct their operations via a social security number-verified K-Bank account.
The neobank-crypto exchange partnership has been touted as a golden ticket for crypto firms and banks alike. With K-Bank, Upbit customers have been able to open accounts online, rather than having to visit brick-and-mortar bank branches, as has been the case with all four of Upbit’s biggest rival exchanges.
The partnership has seen Upbit swallow up the lion’s share of the South Korean crypto market in recent years, leaving the likes of Coinone, Korbit, and the former market leader Bithumb in the dust.
Coinone currently has an existing banking deal in place with the traditional finance provider Nonghyup Bank (NH). This has meant that customers using Coinone’s platform have had to make KRW deposits and withdrawals via NH accounts.
But, the news agency Yonhap noted, that this deal’s days could be numbered. Per the report, financial regulators are “negative” about the idea of a crypto exchange “forming real-name account partnerships with two or more banks, so Coinone is expected to terminate its contract with Nonghyup Bank.”
This would be a blow to NH, which has developed a range of crypto-related business plans – and also provides real-name banking services to Bithumb.
Kakao, meanwhile, is another firm with a number of irons in the crypto fire: It was an early investor in Upbit and has launched its own cryptoasset and blockchain network via its Ground X subsidiary.
The Kakao Bank-Coinone deal will need to be given a final stamp of approval from the regulatory Financial Intelligence Unit and the Financial Services Commission.
The new partnership will likely pique the interest of the likes of the fast-growing Toss Bank, which has also been mooted in the media as a possible future exchange banking partner.
– ‘7 South Korean Securities Firms Will Launch Crypto Exchanges in 2023’ – Report
– 10 Traditional Companies that are Moving into Crypto Despite Market Downturn
– Why Celsius and Voyager Were More Like Uninsured, Quasi-Banks
– Banking Giant Santander is Set to Offer Crypto Trading to Brazilians as Crypto ‘Is Here to Stay’