South Korean Banks Backing Off from Bitcoin

Amid tightening regulations, Korean financial institutions are pulling back from the crypto economy.

On Monday, two major South Korean banks announced that they are closing their reward programs through which clients purchase bitcoins with credit card bonus points.

Shinhan Bank will discontinue its Bitcoin point swap service on January 15, while KB Kookmin Bank will end its services on January 22.

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While Sinchain card allows its customers to exchange points to an equivalent amount of bitcoins at a rate of one point per won, KB card only allows its clients to exchange bitcoins worth between 1,000 points and 300,000 points.

Both card issuers partnered with blockchain firm Coinplug to provide this service to their customers.

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These decisions came as the South Korean authorities are getting more and more strict with their regulations on the crypto market.

Choe Heung-sik, Financial Supervisory Service Governor, recently said: “The government’s stance is prohibiting financial institutions from entering the virtual currency market or nurturing environments for trading.”

South Korean financial institutions are taking a tough stance against cryptocurrencies with tightening regulations. The commercial banks in the country stopped opening new virtual accounts, which are necessary to trade on South Korean crypto exchanges. Two other banks, Woori Bank and Korea Development Bank, announced that they are also closing all virtual accounts provided to exchanges by the end of this week.

In September, after just two months of partnership with Bithumb, the largest crypto exchange on the Korean peninsula, five plastic card issuers – Shinhan, Hyundai, Hana, BC, and Lotte – stopped allowing customers to purchase digital coins with their cards.

The increasing interest of the Korean population in the crazy crypto economy has attracted the attention of the government. The South Korean government has formed committees to study the possibility of regulating this crazy market but has allowed the operation of crypto exchanges within its borders under strict rules.

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