South Korean banks call for relaxed crypto partnership rules: report

South Korean banks are advocating for more flexible regulations regarding their partnerships with cryptocurrency firms. This move is part of a broader effort to enhance collaboration and improve the country's crypto landscape.

Leaders from South Korea's major banks, including KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup, along with regional banks like Jeonbuk Bank and Toss Bank, have urged lawmakers to ease current restrictions. They propose allowing local crypto exchanges to partner with multiple banks, rather than the current one-to-one model.

Currently, South Korean crypto exchanges must partner with banks to offer fiat-to-crypto services, which requires users to register real-name bank accounts for anti-money laundering purposes.

The exclusive partnership model has favored certain banks, such as K-Bank, which saw significant user growth after partnering with Upbit.

South Korea is also planning to ease restrictions on institutional crypto investment. The Financial Services Commission (FSC) aims to allow legal entities to invest in cryptocurrencies, starting with non-profit organizations and gradually expanding to other entities.

The FSC is working on comprehensive guidelines for institutional crypto investment, expected by the third quarter of 2025. This shift reflects South Korea's evolving stance on crypto, moving towards a more regulated and open environment.

These developments indicate a significant shift in South Korea's approach to cryptocurrency regulation, aiming to foster a more inclusive and competitive market environment.

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