Shinhan, a South Korean bank, has reportedly started testing its new bitcoin wallet service. When fully released to the public sometime in 2018, the bank will become the first regulated financial institution to offer a bitcoin wallet. Shinhan has not announced any plans to provide trading or brokerage services and may rely on other established exchanges to deliver these features.
Increasing Non-Technical Crypto Adoption
Shinhan is South Korea’s second-largest bank regarding market capitalization and customer base. Releasing a bitcoin wallet that is backed by their existing financial infrastructure will no doubt increase adoption of digital currencies in the country. It is interesting to note that South Korea is already one of the top cryptocurrency trading nations by volume in the region, rivaled only by Japan. With a customer count well into the millions, Shinhan has the potential to take the Korean cryptocurrency market by storm.
South Korea is also home to Bithumb, the world’s largest cryptocurrency exchange by volume. Earlier in 2017, a major hack that affected three percent of its user base, or 30,000 users, caused upheaval in the sector. Even though Bithumb was quick to refund and compensate those affected, people’s trust in the exchange dropped significantly in the aftermath of the breach.
According to Naver, a South Korean media outlet, Shinhan began looking into the possibility of a secure cryptocurrency wallet shortly after the Bithumb hack. As it stands, the bank will make their wallet service completely free to use and instead, charge a small fee for withdrawals.
Private Key Ownership
Like many privately owned and commercial cryptocurrency wallets, Shinhan does not intend to give customers control over their bitcoin wallet’s private key. The bank will assume the responsibility of their customers’ bitcoin, providing them with a relevant front-end, that will include analysis and statistics. In addition to issuing and managing wallet keys, Shinhan will also secure them in what they’re calling a “virtual vault.”
Most cryptocurrency enthusiasts scoff at the concept of not having control over their private keys. After all, one of the main aims of the bitcoin revolution was to rebel against centralized control over money. But while that argument is legitimate, others argue that most people lack the technical knowledge to safeguard their private keys. That seems to be the exact type of audience that Shinhan is targeting with their bitcoin wallet and vault service.
South Korea: A Hub for Crypt Growth
Bitcoin’s growth in South Korea in the past few years has been nothing short of extraordinary. It has been so explosive, in fact, that two major Korean exchanges, Bithumb and Coinone, unveiled walk-in stores in Seoul where people can buy and sell cryptocurrencies. Companies based in South Korea, including Samsung, have also expressed interest in integrating digital currencies into their corporate infrastructure.
The South Korean government’s stance on the legality of bitcoin has also cleared up recently, with the Financial Supervisory Service disclosing that they have no intention of regulating the currency. Furthermore, Shinhan’s decision to launch a wallet service in 2017 can only mean that they are optimistic about the future of the cryptocurrency market. Shinhan’s wallet service may very well make bitcoin commonplace in South Korea, considering the commercial success of the bank.