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Partnerships with crypto exchanges proved to be a profitable arrangement for South Korean banks. Crypto transaction fees from such partnerships more than doubled for the second quarter of 2021 despite the volatility of the digital currency market.
During the second quarter of 2021, three South Korean banks that entered into partnerships with crypto exchanges raked in a total of 16.9 billion won (around $14.71 million) in transaction fees generated from such arrangements, according to the Korea Herald. The banks include K bank, NH Nonghyup Bank, and Shinhan Bank based on data collected by Rep. Yun Chang-hyun of the People Power Party.
South Korea requires crypto exchanges to use real-name bank accounts for their clients as part of their efforts to regulate the crypto industry. Bithumb, Coinone, Korbit, and Upbit, the country’s top four crypto exchanges, have already entered into partnerships with local banks to meet this regulatory requirement.
The second-quarter figure is more than double the crypto transaction fees banks collected during the previous quarter. In Q1 2021, banks raked in around 7 billion won (approximately $6.8 million) for such fees.
The report also broke down the transaction fees collected per bank during the period. K bank leads the pack having made 12 billion won ($10.4 million) from its partnership with South Korea’s largest crypto exchange, Upbit. The latest figure represents a massive rise from the 5.2 billion won the internet-only bank collected during the first quarter and is over 71 percent of the bank’s total revenues.
Meanwhile, NH Nonhyup comes in second with a recorded 3.1 billion won ($2.6 million) in transaction fees for the second quarter, a massive increase from the first quarter’s 1.3 billion won. The bank has partnerships with the crypto exchanges Bithumb and Coinone, with the latter exchange contributing a total of 1.78 billion in transaction fees for the first and second quarters.
At the third spot is the Shinhan Bank, which has a partnership with the crypto platform Korbit. The bank reported 343 million won ($0.3 million) in transactions fees for the second quarter, almost doubling the first quarter’s 175 million.
The increase in transaction fees for the second quarter is attributed to the rise in crypto investors. “Compared to the beginning of the year, the number of accounts has increased five-fold and the balance of deposits has quadrupled, and the coin craze has not yet ended, with Bitcoin prices recently surging again,” Rep. Yun Chang-hyun said.
