Presidential candidates divided over 'one crypto exchange-one bank' rule
Visitors receive consultations at a Bithumb lounge in southern Seoul, Friday, while the price of Bitcoin is displayed on a screen. Yonhap
The financial authorities and the crypto industry are closely monitoring the outcome of the June 3 presidential election, as presidential candidates Lee Jae-myung of the liberal Democratic Party of Korea (DPK) and Kim Moon-soo of the conservative People Power Party (PPP) have taken divergent stances on the so-called “one crypto exchange-one bank” rule.
The regulation restricts crypto exchanges to partnering with only one bank for deposit and withdrawal accounts.
Authorities and industry officials are bracing for potential impacts on the regulatory landscape if any changes are made to the rule.
Kim has formally pledged to abolish the rule as part of his campaign platform, aiming to boost the domestic crypto industry. In contrast, Lee’s camp has effectively suspended internal discussions on the matter and has refrained from articulating a clear position, signaling his tacit support for maintaining the current system.
Market observers note that Lee’s cautious approach likely reflects concerns over heightened money laundering risks and a potential increase in capital concentration at major exchanges such as Upbit and Bithumb if the regulation is lifted.
The Financial Services Commission (FSC), the country’s top financial regulator, also remains cautious given the sensitivity of the regulation.
The one exchange-one bank rule was implemented to enhance account oversight and prevent money laundering.
Under this regulation, Korea’s five cryptocurrency exchanges have partnered with a single bank for real-name verified accounts. Upbit is linked with Kbank, while Bithumb has teamed up with KB Kookmin Bank. Coinone partners with KakaoBank, Korbit with Shinhan Bank and GOPAX with Jeonbuk Bank.
Together, Upbit and Bithumb account for more than 97 percent of total trading volume, with individual market shares of around 72 percent and 25 percent, respectively.
Lee Jae-myung, presidential candidate of the Democratic Party of Korea, greets citizens at his campaign vehicle near a traditional market in Suwon, Gyeonggi Province, Monday. Behind Lee’s vehicle, a large banner of People Power Party candidate Kim Moon-soo is displayed. Joint Press Corps
The banking sector and the virtual asset industry have long expressed hope that regulators will allow exchanges to establish partnerships with multiple banks, voicing concerns that the current rule undermines system stability and limits consumer choice.
For banks, such partnerships offer a range of benefits, including increased deposit holdings, an influx of new customers and additional revenue from firm banking fees.
During a meeting in early April between bank CEOs and PPP lawmakers overseeing financial affairs, Woori Bank CEO Jeong Jin-wan expressed support for a multi-bank partnership model, suggesting it would be a step in the right direction.
"Maintaining the one exchange–one bank system no longer seems necessary, as the legal framework has largely been established,” an official from the crypto industry said. “The focus should now shift to enhancing investor convenience and promoting market autonomy by allowing exchanges to partner with multiple banks."
Regarding the issue, FSC officials noted that although there is a consensus on the need to relax the one exchange–one bank rule, unresolved concerns remain regarding the risk of money laundering.
During a recent press conference, FSC Chairman Kim Byoung-hwan said, "Since the regulation aims to mitigate money laundering risks, we will thoroughly assess whether banks and virtual asset firms have effective prevention and monitoring systems in place before reaching a decision."