Bank leaders urge lawmakers to change AML restrictions
Top executives from South Korea’s major banks met with ruling party lawmakers on Wednesday, requesting relaxed restrictions on banking partnerships with crypto exchanges. Under current regulations, each exchange can partner with only one bank for fiat services, limiting competition and consumer options.
Jung Jin-wan, President of Woori Bank, pushed for allowing exchanges to form relationships with multiple banks. He argued this would boost stability and reduce concentration risk in the system.
Exclusivity has created winners and losers
The current one-exchange-one-bank policy has benefited select banks. K-Bank, for instance, saw its user base balloon after securing a partnership with Upbit in 2020. By the end of 2024, K-Bank had nearly 13 million users, up from just over 2 million before the deal.
Jung said, "There are limitations on consumer choice and institutional clients. Please expand the regulation to allow one exchange to partner with multiple banks."
Institutional access may soon expand
As the country gradually lifts the ban on institutional investment in crypto, exchanges like Upbit and Korbit are preparing to onboard corporate clients. This regulatory shift could prompt more competition among banks and exchanges, making partnership flexibility increasingly important.
