Hana Bank partners with BitGo for digital asset custody services in South Korea.

Hana Bank partners with BitGo for digital asset custody services in South Korea.

The Rise of Digital Asset Custody Services in South Korea

South Korean financial giant KEB Hana Bank has recently made a significant move in the blockchain industry by entering into a strategic business agreement with California-based crypto custody and security platform BitGo. This collaboration aims to offer digital asset custody (DAC) services to KEB Hana Bank’s clients, starting in the second half of 2024.

The announcement was made during the Korea Blockchain Week conference held in Seoul, where Hana Bank unveiled its plans to explore Central Bank Digital Currency (CBDC) pilot projects and stablecoin alternatives in partnership with the Central Bank of Korea (BOK). In line with this initiative, the bank will leverage BitGo’s blockchain security technology for its digital asset custody operations.

Digital asset custody has become increasingly essential as the popularity and adoption of cryptocurrencies continue to rise. Custody services involve securely storing and managing digital assets on behalf of individuals and institutions, ensuring the safeguarding of their investments. These services play a vital role in building trust and consumer protection in the digital asset market.

By partnering with BitGo, a leading crypto custodian serving over 50 countries, Hana Bank aims to tap into BitGo’s expertise and global network to enhance the transparency and safety of the South Korean digital asset industry. BitGo is also planning to establish an office in South Korea, adhering to local regulations and obtaining the required licenses.

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This strategic collaboration comes on the heels of BitGo’s successful Series C funding round, where the company secured $100 million, valuing the firm at $1.75 billion. While BitGo did not disclose the identities of the investors, this financing round further solidifies the company’s position as a key player in the digital asset custody space.

South Korea’s Favorable Regulatory Environment

South Korea has been actively embracing blockchain and cryptocurrency regulation to foster investor protection and create a favorable environment for the industry. In July, the country’s financial authorities announced plans to amend the Token Securities Offering (STO) bill to legally regulate blockchain-powered security tokens and introduce investor protection measures.

The impetus for stronger regulatory measures came after the collapse of tokens created by Do Kwon, a South Korean developer, which exacerbated a significant crypto-market downturn worth $2 trillion. As a response, the South Korean National Assembly passed the Virtual Asset User Protection Act, granting regulatory oversight to the Financial Services Commission and empowering the Bank of Korea to investigate crypto platforms.

Under these new regulations, crypto companies in South Korea will be required to have insurance coverage for their reserves. This insurance is meant to safeguard customers against potential losses caused by theft or technological failures. Furthermore, the government’s proactive stance on regulating crypto assets has attracted numerous companies and exchanges, including BitGo, to establish a presence in South Korea.

Conclusion

As the blockchain industry continues to evolve, digital asset custody services have emerged as a crucial component of the ecosystem. South Korea, with its favorable regulatory environment and forward-thinking approach, is witnessing a surge in collaborations and partnerships in this space. The agreement between KEB Hana Bank and BitGo is a significant development that will not only improve the security and trustworthiness of the South Korean digital asset industry but also foster further growth and innovation within the blockchain ecosystem in the region.

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