Bill to End South Korea’s ‘One Exchange, One Bank’ Rule Heads to National Assembly

A bill that would allow cryptocurrency exchanges in South Korea to secure real-name accounts from multiple banks is set to be taken up by the National Assembly.

Edaily reported on Aug. 26 that the National Assembly’s Political Affairs Committee will hold a plenary meeting later in the day to table 136 bills, including an amendment to the Act on Reporting and Use of Certain Financial Transaction Information proposed by People Power Party lawmaker Kim Sung-won.

The centerpiece of the amendment is to establish a legal basis for virtual-asset service providers to receive real-name verified deposit and withdrawal accounts from multiple financial institutions rather than just one. Specific standards, conditions and procedures for opening the accounts would be set by presidential decree. If passed, the bill could replace the current de facto one-exchange, one-bank system with a structure that permits multiple banking partnerships.

Upbit currently partners with K Bank, Bithumb with KB Kookmin Bank, Coinone with KakaoBank, Korbit with Shinhan Bank and Gopax with Jeonbuk Bank for real-name accounts. The one-exchange, one-bank system is not explicitly codified in law. It became established after the government introduced a real-name system for virtual-asset trading in 2017 and the Financial Services Commission issued anti-money-laundering guidelines in 2018.

Financial authorities appear cautious about changing the system immediately. The Financial Services Commission told the committee that the effects of the current framework on anti-money-laundering efforts and the exchange market have not been sufficiently verified. It also said any review of a system change should come after the second phase of digital-asset legislation takes effect and after authorities assess exchanges’ anti-money-laundering capabilities and the market’s competitive structure.

The amendment will next be referred to the committee’s bill-review subcommittee for more detailed discussions. The committee’s chief specialist also said the proposal should be considered alongside broader talks on the second phase of digital-asset legislation, citing the possibility that allowing multiple bank partnerships could concentrate bank demand on larger exchanges.