South Korea's fourth-largest bank will form a joint venture to enter the cryptocurrency custody business.
Woori Financial Group, South Korea's fourth-largest lender in terms of total assets, has joined the growing list of institutions that have entered the cryptocurrency custody market.
According to a July 11 report by Woori Financial Group, the major banking group has formed a joint venture called D-Custody with local blockchain development company Coinplug. Someone could form as soon the JV as this month.
Woori Bank's move into crypto custody aims to capitalize on the growing demand for cryptocurrency safekeeping solutions among large South Korean corporations with exposure to the burgeoning asset class.
Because it prohibited domestic firms to store the cryptocurrency on exchanges, they must rely on self-custody at their own risk.
Cho Jin-Seok, COO of Korea Digital Asset, claimed that crypto custody is more predictable than trading, which is why domestic banks are embracing it.
While Japan allows banks to offer crypto custody directly to their clients, South Korea requires the formation of a JV, which complicates the process. Before Woori Bank, KB Financial Group had to take the same route to enter the cryptocurrency custody market.
Several major European and American banks, including Deutsche Bank, New York Mellon, and Standard Chartered, have already made forays into the aforementioned market niche.
KB Kookmin Bank, one of South Korea's largest banks, has established "strategic technology cooperation" on digital asset custody with a venture fund and trading platform. The announcement comes after one of its major competitors, NongHyup, or NH Bank, announced in early July that it intends to launch cryptocurrency custodial services.