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South Korea’s Largest Bank Reveals Crypto Custody Service Filing and Potentially Even More Crypto Services to Come

The largest bank in South Korea, KB Kookmin Bank has revealed its filing of a trademark application for KB Digital Asset Custody (KBDAC), its crypto custody service.

The crypto custody service will be made available for assets including Bitcoin (BTC) and Ether (ETH). The trademark application was filed with the Korean Intellectual Property Office, as reported by a local news outlet.

The application stated that the bank could potentially launch the service shortly, and also means that the entity has already begun the branding of products and the development has almost been finalized.

KB announced its partnership with Atomrigs Lab in June 2019, to develop a crypto custody service leveraging a product that secures crypto utilizing multi-party computation (MPC) technology which Atomrigs Lab specializes in. MPC technology generates random key parts rather than a single private key. These key parts can be stored separately to protect the assets from the vulnerability of being stolen.

According to the report, KB could potentially add to its suite of services involving digital assets, including trading, investment advisory, and asset management.

Less than a month ago, South Korea’s National Assembly followed suit and has amended the Act on Reporting and Use of Specific Financial Information, fully legalizing cryptocurrencies in the nation.

Following the passage of the amendment by the South Korean Parliament, cryptocurrency holding and trading have finally found their place in the nation’s legal system. It is speculated that this turn of events will usher in a restructuring of the country’s blockchain sector.

After President Jae-in Moon signs the passed amendment, the enactment process will kickstart and is expected to take full effect one year from the date of signing, with a six month grace period to follow for a market adjustment.

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Blockchain-Based Driving Licenses in South Korea Hit One Million Drivers

Blockchain-powered driving licenses were made available as an option in South Korea in May.

Blockchain Digitizes South Korea

Since then, one million South Koreans have already leveraged this blockchain alternative, giving up their physical driver’s license. The blockchain-based driving license is offered to South Koreans, along with the PASS smartphone app, which is a transportation and travel app. Through the application, South Korean drivers can renew their digital licenses. As for non-permanent residents of the country, an English version of the license is offered as an alternative.

According to data from Statista, the number of South Koreans subscribed to the blockchain-based driver’s license represents more than 3% of the entire driving population in South Korea. The blockchain-powered driving license is the first digital identification card to be issued in South Korea, after the country’s Ministry of Science and ‘Information & Communications Technology’ (ICT) approved it in September 2019.

The blockchain-based project was officially launched in May, with the National Police Agency of Korea, the Korea Road Traffic Authority, and the country’s three major telecom providers SK, KT, and LG U+ collaborating to set the project in motion.

Just like the traditional ID card, the South Korean blockchain-powered digital card can be used for proof-of-age identification, buying alcohol and cigarettes, and much more. In order to provide proof of their driving license, users can show the PASS application, and flash the QR code on it.

Rental car industries and shared rides services are also interested in the blockchain technology, hoping to maybe use it in the future to replace face-to-face verification checks.

South Korea Loves Everything Bitcoin & Blockchain

Blockchain technology has been increasingly popular and revolutionized in South Korea. Earlier this week, South Korea’s largest commercial bank – Kookmin Bank – announced that they will start offering Bitcoin (BTC) custody services, thanks to a new partnership conducted with coin exchange Cumberland Korea and blockchain venture fund Hashed.

According to a blog post by Hashed’s legal compliance officer Jin Kang on August 7, Kookman Bank plans on normalizing cryptocurrency trade:

“KB Kookmin Bank, the largest bank of the four, anticipates that the digital asset industry will not only involve cryptocurrencies but also other traditional assets such as real estate, artwork, and other reified rights that will be issued and traded on blockchain platforms.”

South Korean Kookmin Bank to Launch the First Crypto Fund

Kookmin Bank, the largest banking financial institution in South Korea, has announced its plans to launch the nation’s first crypto fund, a move targeted at retail investors.

According to the announcement from the bank, a Digital Asset Management Committee has been established to oversee the launch of an Exchange Traded Fund (ETF) product right after the regulatory laws in the country permit.

“We will launch a virtual asset-themed equity fund, etc., as soon as possible,” says Hong-Gom Kim, head of Kookmin Bank’s index quant management division. “We will also publish periodicals.”

In a bid to complement its planned launch of a crypto fund, the bank is also planning a move that will see it float a hybrid fund that will feature both traditional assets and cryptos. Per the announcement, the hybrid fund will be a reference point for outsourced chief investment officers to provide guarantees on their investments.

The planned move from Kookmin Bank is very pivotal in South Korea. The country is a major crypto hub in Asia with significant digital currency traction amongst both retail and institutional investors. Billed as the largest bank by total Assets Under Management (AUM) which topped 100 trillion Korea Won (approximately US$83.8 billion), according to data gleaned from the bank’s website.

With a deep customer base amongst the top stakeholders in the country, the embrace of the proposed crypto and hybrid funds is poised to gain massive traction from investors across the board.

While all hands seem on deck for the proposed Kookmin Bank products, scaling the stringent regulatory provisions is another hurdle that must be crossed. South Korea is known for its strict regulations imposed on digital currency trading platforms, most of whom were sent packing on grounds they could not secure a banking partner last year.

With the regulatory ecosystem largely unpredictable, Kookmin bank may ride on its previous crypto custody services and broader grip on the economy to steer its way to secure the required licenses required to float the products.