One of South Korea’s leading cryptocurrency exchanges just introduced a new feature that allows customers to open bank accounts through its mobile app.
Bank account opening, on phone, through a crypto exchange
Bithumb announced that customers can now open accounts with NongHyup Bank directly through its mobile app or website, without the need for users to visit a bank branch in person or download separate banking apps to open a “real-name” bank account linked to their crypto trading account on Bithumb.
South Korean regulations require crypto exchanges to use real-name verified bank accounts for users who wish to trade fiat currency on their platforms.
So by default, local exchanges already knows everything about their customers what banks know, they have all the data and personal informations.
By integrating the account opening process into its app, Bithumb making it easier for customers to start trading cryptocurrencies.
“Launching this non-face-to-face deposit/withdrawal account opening service lets us provide users with a more convenient environment for trading cryptoassets.”
Market competition between exchanges
Bithumb’s new move is seen as an effort to challenge its biggest local rival, Upbit, which has dominated over 80% of South Korea’s crypto trading market.
Upbit’s partnership with neobank K Bank gave it a competitive edge during the COVID-19 pandemic when similar, non-face-to-face services were heavily promoted by the government.
Bithumb has implemented various strategies to reclaim market share, including temporarily eliminating commission fees on transactions.
While this indeed helped Bithumb briefly surpass Upbit in trading volume, the exchange has since reinstated these fees.
Bithumb faced another financial challenges too, such as having to reverse a decision to raise its deposit usage fee rate to 4% in July.
And if this is not enough, South Korean regulators began investigating a possible attempt to manipulate the price of the altcoin AVAIL on Bithumb’s platform.
Banking institution in the NFT sector
Bithumb’s banking partner, NongHyup Bank is reportedly exploring the use of NFTs to drive future business growth.
Despite the closure of NFT divisions by two major South Korean tech companies, domestic banks like NongHyup continue to see potential in NFTs for their business strategies.
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