South Korea is contemplating ending exclusive banking partnerships for crypto exchanges, which could significantly impact the cryptocurrency market.
Political Parties Push for Banking Competition in Crypto
The **Democratic Party (DP)** and **People Power Party (PPP)** are discussing revising rules that restrict banking activity for crypto exchanges. **K Bank**, which partners with **Upbit**, currently monopolizes significant fiat flows.
> "The current rules limit citizens' ability to trade cryptocurrencies through their preferred banks and have solidified market monopolies." - Park Soo-min.
Deregulation May Reduce User Fees
Ending exclusivity challenges **K Bank’s business model**, potentially increasing competition among banks. Multiple banks may begin partnering with crypto exchanges, diversifying partnerships and potentially lowering user fees.
Past Banking Laws Led to Crypto Exchange Closures
Previously, stringent banking requirements in 2021 led to exchange shutdowns. The relaxation of these rules paved the way for competition and volatility, similar to the deregulation impacts seen in Japan.
Data suggests broader access could lead to diversified liquidity and enhanced retail market access, reflecting trends from past global deregulation efforts.
The discussion around deregulating bank exclusivity in South Korea could significantly reshape the cryptocurrency market, increasing competition and lowering financial barriers for users.
