[Exclusive] Virtual Asset Corporate Investment Market Expanding... Shinhan Bank Makes Sudden Capital Increase in Custody Company

Custody Market Expected to Explode with Increased Corporate Investment

Shinhan Bank Moves to Increase Capital in Custody Company

Adopts Preemptive Share Expansion Strategy

Hana Bank Working Behind the Scenes to Compete with Industry Leader Upbit

Major commercial banks are eyeing the cryptocurrency custody market, where digital assets are stored in secure third-party locations. This is based on the assessment that the cryptocurrency custody market will grow explosively as corporate virtual asset investment becomes gradually permitted.

According to financial industry sources on the 14th, Shinhan Bank is pursuing a capital increase in Korea Digital Asset Custody (KDAC). The scale of the capital increase is known to be around 1 billion won. Along with the existing investment (500 million won), the total investment will grow to 1.5 billion won, expected to exceed co-shareholder NH Bank's investment (1 billion won). Shinhan Bank had previously invested in KDAC in 2021.

Shinhan Bank's move to secure additional custody company shares is to proactively respond to market changes. Custody refers to safekeeping and management services for virtual assets held by companies and individuals. The industry expects a new market worth tens of trillions of won to open when corporate virtual asset investment is permitted. Korbit Research Center predicts that economic value of 46 trillion won will be created by 2030 when the corporate investment era fully begins. A Shinhan Bank official stated, "We will respond to the new market by strengthening cooperation with KDAC."

Besides Shinhan Bank, all other major commercial banks are collaborating with custody companies. KB Bank established Korea Digital Asset (KODA) with blockchain developer Hatch Labs. Additionally, Hana Bank partnered with BitGo Korea, while Woori Bank and NH Bank joined hands with BDACS and KDAC respectively.

Partnerships between banks and cryptocurrency exchanges are also active. Competition has especially intensified since KB Bank took Bithumb, one of the two major cryptocurrency exchanges, from NH Bank. Bithumb chose KB Bank over NH Bank, its account partner for 7 years, to reduce the gap with leading exchange Upbit. Bithumb customers must open and link KB Bank accounts from next month. About 20,000 accounts have already been transferred in advance. A banking industry official explained, "As the deposits of Korea's top 5 cryptocurrency exchanges (Upbit, Bithumb, Coinone, Korbit, Gopax) doubled from 5 trillion to 10 trillion won in a year, securing exclusive exchange accounts would result in significant customer acquisition."

This is why Hana Bank is working behind the scenes to target Upbit, Korea's largest exchange whose contract with K-Bank expires this October. A Hana Bank official said, "The opening of the corporate market is a different story from individual investors," adding "We are in working-level discussions for partnership with Upbit." Woori Bank also expects collaboration with Upbit as Dunamu, Upbit's operator, has secured 1% stake in Woori Financial Group.

Reporter Park Jae-won