By Lee Min-hyung
Korean banks are expanding their commission profits by offering real-name bank accounts for their affiliated crypto exchanges. With large-cap cryptocurrencies showing signs of a strong rebound, sources said that the banks will see more profits in the third quarter of this year.
For now, three lenders ― Shinhan Bank, NongHyup Bank and K Bank ― have signed partnerships with four local crypto exchanges, allowing users of the operators to engage stably in crypto trading even after a new cryptocurrency regulation takes effect next month.
The banks had so far ended up gaining slight commission returns through the partnerships, placing emphasis on generating marketing effects by gesturing to investors that they are friendly to the emerging crypto market.
But with the pandemic-era liquidity continuing to flow into the crypto market, banks are on track to reap more meaningful commission profits. According to data from the Financial Supervisory Service, the three lenders raked in commission profits worth 16.9 billion won ($14.45 million) in the second quarter of this year, up by more than 140 percent from a quarter earlier.
K Bank, partnered with Upbit, was the biggest beneficiary, receiving 12 billion won in commissions. NongHyup and Shinhan followed the list by earning some 4.55 billion won and 343 million won, respectively, during the April-June period.
Industry sources said that their commission profits will continue to rise in the third quarter on signs of a rebound in some major cryptocurrencies. The introduction of the Special Financial Transaction Information Act next month will also help expand the exchanges’ presence in the local crypto market, so chances are the banks will widen their commission profits at least until the end of this year, according to the sources.
“Most banks ― excluding the three lenders ― have remained reluctant to sign any partnerships with crypto exchanges, as they may be exposed to risks from possible cyberattacks that could occur during crypto trading,” a bank industry source said. “But more banks will likely jump into the market if the crypto-affiliated banks continue to achieve stable growth in commission returns and if they are not mired in any big security scandals.”
Since last month, the prices of major cryptocurrencies ― such as Bitcoin ― have been on a strong rally. According to data from Upbit, the Seoul-based crypto exchange, the Bitcoin price soared by more than 40 percent as of Friday, compared to the price on July 20. The Ethereum price also surged over 70 percent during the same period.
“The crypto market is regaining momentum for a rebound and banks’ third-quarter commission profits are also widely expected to rise, based on the ongoing rally of the major cryptocurrencies,” another source from the financial industry said.Internet Explorer Channel Network