South Korea’s National Assembly is set to examine a bill that would give cryptocurrency exchanges a legal route to obtain real-name deposit and withdrawal accounts from more than one bank. If enacted, the measure could shift the market away from the country’s long-running de facto model in which each exchange works with a single banking partner.

The proposed amendment would create an explicit legal basis for virtual-asset service providers to receive real-name verified accounts from multiple financial institutions. Detailed standards, conditions and procedures for opening those accounts would not be written directly into the law but instead set later by presidential decree.

A change to an unwritten market structure

South Korea’s current one-exchange, one-bank arrangement is not expressly set out in statute. Even so, it became the standard after the government introduced a real-name system for virtual-asset trading in 2017 and after the Financial Services Commission issued anti-money-laundering guidelines in 2018.

Under the existing setup, major exchanges each maintain a single real-name account partnership with one bank. Upbit works with K Bank, Bithumb with KB Kookmin Bank, Coinone with KakaoBank, Korbit with Shinhan Bank and Gopax with Jeonbuk Bank. The new bill would open the door to multiple banking relationships rather than just one.

Authorities urge caution on timing

Financial authorities have signaled that they are not ready to endorse an immediate switch. In comments to the relevant committee, the Financial Services Commission said the effects of the present framework on anti-money-laundering efforts and on the structure of the exchange market have not been sufficiently verified.

The commission also argued that discussion of any major system change should follow the second phase of digital-asset legislation. It said authorities should first evaluate exchanges’ anti-money-laundering capabilities as well as the competitive dynamics of the market before deciding whether to alter the banking model.

Competition concerns remain part of the debate

The proposal is not being assessed only through a compliance lens. The committee’s chief specialist said the amendment should be reviewed together with broader discussions tied to the second phase of digital-asset legislation.

One reason is the possibility that allowing exchanges to form relationships with several banks could have uneven market effects. According to the specialist’s assessment, broader access to bank partnerships may end up concentrating bank demand around larger exchanges rather than spreading opportunities evenly across the sector.

What happens next

The amendment will now be sent to the committee’s bill-review subcommittee for more detailed discussion. That stage is expected to focus on the mechanics of the proposal as well as its relationship to the wider legislative package for digital assets.

For now, the bill has not changed the current framework. The next confirmed step is subcommittee review, where lawmakers and authorities are expected to weigh whether a legal basis for multiple bank partnerships should move ahead on its own or be considered alongside the second phase of digital-asset legislation.

Source: en.bloomingbit.io