The crypto market is rumoured to reach 10% of the world GDP by five to 7 years, thus booming to around $7 trillion in market capitalization. With the current growth of digital currencies, some of the heat is coming off with Korean banks trying to block virtual accounts. The Korean government is working to phase out cryptos step by step, and banks seem to be collaborating along.
Korea Times just reported that Shinban Bank, the nation’s biggest bank by assets, would not introduce a real-name verification service designed to allow deposits and withdrawals from real-name virtual bank accounts. What this means in reality is that the bank will stop the creation of virtual accounts in any case.
An official of Shinban Bank said:
“We’ve developed a system to introduce identifying virtual account customers in accordance with the government’s efforts to curb the cryptocurrency craze. However, we decided to scrap the service enabling the trade of digital tokens which has become a serious social issue.”
He added that from now on, all cryptocurrency trading will be banned, irrespective of the nature of accounts: old or new, and the verification process will not matter for the new policy.
What is more interesting is that the bank has already spoken with the three biggest virtual currency exchanges to file plans to close open accounts immediately that are opened at the bank.
Another Korean bank joining the battle against the crypto hype is the The Industrial Bank of Korea. IBK has not plans of opening a verification system, it will be phasing out accounts immediately.
In addition, financial institutions will work towards banning locally issued cards such as Visa and MasterCard for the purchase of cryptos overseas. Since many Korean investors can buy and trade virtual currencies on international exchanges with debit/credit cards, this poses another hurdle for the government’s effort to curb the ongoing crypto craze. However, Korea is currently taking serious steps towards limiting the “heat”.