While South Korea’s cryptocurrency regulations have historically oscillated between cautious embrace and outright hostility—recall the 2017 ICO ban that sent domestic crypto projects scrambling overseas—2025 represents a watershed moment where the nation’s banking giants are finally positioning themselves to capitalize on what they’ve been watching from the regulatory sidelines for nearly eight years.
After nearly a decade of regulatory whiplash, South Korea’s major banks are finally ready to embrace the crypto revolution they’ve been sidelined from since 2017.
The transformation arrives courtesy of President Lee Jae-myung’s administration, which has effectively reversed years of regulatory hostility through legislation permitting banks to legally issue and custody stablecoins. The Virtual Asset User Protection Act, enforced since July 2024, has provided the legal clarity that institutions desperately needed—though one might wonder why it took nearly a decade to achieve what other jurisdictions managed in half the time.
Shinhan, KB Kookmin, Woori, and KEB Hana are now scrambling to establish dedicated digital asset teams, dusting off crypto projects that were hastily shelved during the previous administration’s more restrictive era. Woori Bank has emerged as the early frontrunner, launching a Digital Asset Team focused on stablecoin consortia and crypto service research and development, while its competitors pursue blockchain partnerships both domestically and internationally.
The banks’ strategic initiatives extend beyond mere compliance theater. These institutions are developing thorough crypto ecosystems encompassing stablecoin issuance, digital asset custody, and trading platforms—essentially building the infrastructure to compete directly with established crypto exchanges that have dominated the Korean market for years.
Regulatory oversight remains characteristically thorough, with the Financial Services Commission and Financial Supervisory Service jointly crafting frameworks that balance anti-money laundering safeguards with innovation incentives. The agencies are particularly focused on crypto lending services, implementing leverage limits and risk disclosure requirements that respond to legitimate market concerns about excessive speculation.
This institutional pivot reflects broader market dynamics: growing demand from both retail and institutional investors who have been seeking regulated alternatives to improve consumer confidence. The banks’ entry signals mainstream financial acceptance of digital assets, though whether they can successfully capture market share from nimble crypto-native competitors remains an open question. Their success will likely depend on execution speed and the ability to leverage existing customer relationships while maneuvering an increasingly competitive landscape. As these traditional financial institutions venture into decentralized territory, they’ll need to master smart contracts and blockchain fundamentals to effectively compete with DeFi protocols that have already demonstrated the efficiency of automated financial operations.
