Within last week, the connection between cryptocurrency and banks saw conflicting signals regarding blockchain adoption within the financial industry. Although in some cases the crypto market sees a growing acceptance, others face complex compliance problems and legal battles.
Last week saw the Korean Financial Services Commission (FSC) reaffirming that there were no restrictions on cryptocurrencies regarding banking services. On the other hand, Coinis from Korea and Bitcoin Max, although they won, faced several legal battles with respective institutions. Outcomes of these cases might serve as a milestone towards bringing cryptocurrency and banks closer.
Positive Trends Between Blockchain and Financial Industry
Recently, South Korean exchanges and crypto businesses have been able to breathe a bit easier, following the FSC’s announcement. Choi Jong-Ku, the commissioner of the agency, made it clear that Korean banks were free to deal with cryptocurrency-related transactions. The representative said:
There exists no issue in banks providing virtual bank accounts to cryptocurrency exchanges.
The announcement made the industry hopeful of continuous support of the financial institutions towards the blockchain.
Additionally, several court and off-court battles between banks and blockchain companies paved the way towards closer cooperation. Coinis exchange won a suit against Nonghyup (NH) Bank following the bank’s withdrawal of all support. In a similar manner, Brazilian Bitcoin Max exchange platform forced Santander and Banco do Brasil to stop their standoffish behavior. In both cases, platforms unblocked their fiat services, tightening once more the close connection between cryptocurrency and banks.
Missing Connection Between Cryptocurrency and Banks
Although in several cases crypto businesses fought successfully, many others still struggle to keep up with the financial industry. In a recent interview, Darren Coote from Cobalt noticed that FinTechs, blockchain-based included, face complex banking procedures. Operations suffer due to the prolonged periods of transfers and documentation needed for a successful business conduction. The MD of the Cobalt stated that blockchain industry achieved very little progress in the relationship between cryptocurrency and banks.
Banks so far refuse to openly accept digital currencies as means of payment, focusing on blockchain technology instead. Additionally, although interested, financial institutions mostly produce trial and test projects involving ledger records. Current crypto assets seem to not be part of the banks’ interests, with Swiss banks leading the adoption rate. However, the rising unbanked market and FinTech competition might push cryptocurrency and banks organizations to work more closely.