“KB Kookmin Bank has been preparing digital asset custody service for a long time. The service will launch this year. Providing digital asset custody service is difficult as bank, so we are preparing it in different form.”
Jinseok Cho, head of the IT Technology Innovation Center at KB Kookmin Bank, who attended the “Define 2020” held at the Sangam JTBC Hall on the 18th declared about the service. He gave a speech about “Digital Asset Custody and DeFi from the financial sector.”
◆ Considering various opportunities related digital assets
“Bank cannot act as a digital asset exchange; however, we are considering a digital asset custody service.” Dealing with assets is an area where a bank can do its best.
He said they are also considering digital asset issuance and funding services. Digital asset-related services that Kookmin Bank is preparing are virtual asset loans and financial services in collaboration with blockchain project teams. “We are also considering a financial service that allows savings to be liquidated into digital assets so that they can be divided and sold until the expiration.”
Customers can get additional interests from the profit earned from selling digital assets without having to pay midterm termination fees.
◆ The role of the bank remains important even when the DeFi grows
“Just because DeFi is decentralized finance doesn’t mean that there is no need for a bank,” said Cho. This is because an institution that can guarantee trust in decentralized services is needed. He said, “Because the DeFi service is specialized for each blockchain ecosystem, the bank should not be in charge of related tasks, thus banks will have to collaborate with the participants of the DeFi ecosystem.”
He said, “I think that DeFi can expand users and apply it to existing traditional financial services,” he said. “Banks just need to continue doing what they can do well, such as guaranteeing the trust of each DeFi product.”
◆ Specific Financial Transaction Reporting and Usage Law, a third-party system to guarantee the trust of the exchange
Director Cho explained the bank’s position on the Enforcement Decree of the Specific Financial Transaction Reporting and Usage Law. He said the bank’s passive reaction toward issuing real-name accounts was to examine whether the AML (anti-money laundering) system was properly installed, but the travel rules was the big problem.
Director Cho mentioned, “the exchange allows users to transfer digitalassets between users, but there is no way to accurately verify that the assets were sent to users on the sanctions list designated by the government.” Although there are ways to verify the identities of the wallet address that sent the digital asset, it is difficult to trust.
He added, “If such issues rise at the exchange where the bank issued real-name accounts, the bank will face severe penalties such as a fine for the government.” “The travel rule has been suspended for one year, but we will have to respond in advance. A third-party credit institution should implement a whitelist system that guarantees the trust of the exchange.”
Translated by Young Hwang