[Executive Summary]

• KakaoBank, a South Korean mobile-only bank, is about to link its real-name bank accounts to a virtual asset exchange (Coinone). KakaoBank and Coinone are at the final stage of negotiations over linking real-name bank accounts. As the partnership between KakaoBank and Coinone is imminent, the total number of banks linking real-name accounts to virtual assets exchange is likely to increase to five. The entrance of internet-based banks, into the virtual assets industry, can be of a positive influence, as it will be more convenient for virtual assets exchange users to open real-name bank accounts.

Coinone, a virtual asset exchange in Korea, is at the final stage of negotiations over linking real-name bank accounts with KakaoBank, a South Korean mobile-only bank. If KakaoBank links its real-name accounts with Coinone, it will become the 2nd mobile-only bank that links real-name accounts with a virtual assets exchange, after Kbank. It is predicted that this linkage between Coinone and KakaoBank will intensify competition among the banks in the virtual assets industry. If the negotiations are finalized, Coinone is predicted to end its partnership with its current partner, NongHyup Bank.

As was the case with the partnership between Kbank and Upbit that began in 2020, the partnership between Coinone and KakaoBank could deliver great merits to both partners. “The partnership between Coinone and KakaoBank can create a synergy effect for both companies. Coinone can take advantage of the brand recognition of KakaoBank, while KakaoBank can pave the groundwork for entering the virtual assets industry.”, an industry official predicted.

Therefore, the total number of banks linking real-name accounts to virtual assets exchange is likely to increase to five (Shinhan Bank, Kbank, NongHyup Bank, Jeonbuk Bank, and KakaoBank). The entrance of the existing banks, especially the Internet-based banks, to the virtual assets industry is expected to have a positive influence on the industry, as it will be more convenient for virtual asset exchange users to open real-name bank accounts.

It can be expected that more banks will attempt to enter the virtual asset market following KakaoBank. Of them, internet-based banks such as Kbank may have the best interest to enter the market to expand their businesses through working with virtual asset exchanges. If such attempts are realized, the market may witness more partnerships between banks and exchanges linking and issuing real-name accounts.