Catenaa, Saturday, May 17, 2025- South Korea plans to deregulate cryptocurrency exchanges could significantly impact the nation’s banking industry, particularly for K Bank, which has strong ties to the exchange market leader Upbit.
Reports from the Financial Post suggest that the Democratic Party (DP), South Korea’s largest political party, is considering scrapping the current fiat on/off ramp regulations for crypto exchanges.
These rules currently require exchanges to partner exclusively with a single bank, which provides customer services through dedicated crypto wallet-linked accounts.
If the DP follows through, exchanges would have the freedom to partner with multiple banks, potentially threatening K Bank’s exclusive relationship with Upbit, which dominates the South Korean market.
K Bank has relied heavily on its partnership with Upbit since 2020, with Upbit accounting for nearly 68% of the domestic crypto market’s trading volume.
Critics have raised concerns that this dependency could derail K Bank’s efforts to go public, should the banking sector undergo deregulation.
The calls for crypto industry deregulation, especially from Lee Jae-myung, the DP’s presidential candidate come ahead of South Korea’s Presidential election scheduled on June 3.
Lee’s campaign is reportedly considering including a manifesto pledge to follow through with crypto-friendly policies, which could further disrupt K Bank’s standing.
Meanwhile, regulators have signaled openness to easing regulations, with the Financial Services Commission (FSC) reviewing whether the current rules effectively prevent money laundering.
This review could pave the way for a more flexible regulatory approach.
