Shinhan Bank decided to make a strategic investment in a company that entrusts and manages digital assets such as virtual currency. This is to do a business that manages and manages digital assets like Kookmin Bank, which previously decided to enter the digital asset trust market. It is analyzed that while financial companies around the world are competitively jumping into this market, the two major domestic banks, Shinhan and Kookmin Bank, have also started competing for leading banks in the digital asset field.
Strategic investment in Shinhan KDAC
Shinhan Bank announced on the 7th that it will pursue strategic equity investment in Korea Digital Asset Management (KDAC), a company specializing in digital asset management. The size and exact timing of the investment were not disclosed. It is estimated at hundreds of millions to billions of billions of dollars. KDAC is a company founded by Cobit, a virtual asset exchange, Blockchain technology company Blocko, and Fair Square Lab, a digital asset research company. He is in charge of the customer’s digital assets and keeps them in custody.
Through this investment, Shinhan Bank plans to secure competitiveness in the field of DeFi, a blockchain-based decentralized finance, and a custodial service that safely stores consumers’ digital assets from external hacking and embezzlement. Under the current banking law, it is impossible for a bank to directly entrust virtual assets. First of all, it explains that it will start a business in the form of investment.
Shinhan Bank expects to diversify its asset portfolio and discover new business models through cooperation with KDAC partners. An official from Shinhan Bank explained, “Digital asset consignment is an area where the bank’s internal control capabilities and experience in consigning general assets can be well utilized.” It is an aspiration to become a bank for digital assets as well as cash.
From March 25, the Special Money Act (Act on Reporting and Use of Specific Financial Transaction Information) will be enforced. Although the government has stated that’virtual currency is not institutionalized’, related projects are expected to gain momentum as taxation on virtual assets is expected to begin.
The biggest asset of financial companies is’trust’, and banks can play a role in reinforcing trust in the blockchain field.
Shinhan Bank is using blockchain technology for a variety of products and services such as gold security service, doctor loan qualification verification, and policy loans for small businesses. Recently, together with LG CNS, he is also participating in digital currency technology verification by the Bank of Korea. It is known that such work is in charge of the blockchain lab inside Shinhan Bank.
‘A quick step’ into the banks’ market
Other banks are also busy preparing to enter the virtual asset market. In November of last year, Kookmin Bank completed an equity investment in Korea Digital Asset (KODA), another virtual asset consignment company. KODA is a company co-founded by Hatch Labs, a blockchain company, and Hashed, a blockchain investment company. Nonghyup Bank is researching a digital asset storage model in cooperation with Pacific law firm and blockchain company Hexland. Woori Bank is preparing related projects in the Artificial Intelligence Division (AI) and Woori Fund Service, an affiliate, and Hana Bank is known to be preparing to build infrastructure related to the Bank of Korea’s CBDC (Central Bank Digital Currency) business.
Bitcoin exceeded 40 million won per bitcoin on this day, and the related market could expand explosively if laws and systems related to virtual assets are supported in the future. An official from the financial sector said, “Because the government is pursuing a real-name deposit/withdrawal system for virtual assets, depending on the level of regulation, the bank’s tasks may increase or decrease. There will be advantages to listen to.”
Reporter Kim Dae-hoon [email protected]
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