South Korean authorities have announced that six major banks will be ready to offer services to digital currency exchanges this month. The government is still working to find a solution for secure data sharing.
Data sharing between exchanges and banks
The Financial Services Commission (FSC) provided additional details about the identification system for virtual accounts. The government plans to require cryptocurrency firms to share users’ transaction data with banking institutions. A FSC official said banks should implement the system soon, which will require exchanges to transmit user data to these institutions by the end of January or the beginning of February.
Implementing this measure aims to end anonymous cryptocurrency trading. Use of virtual accounts will no longer be permitted in the same way. Banks had issued these accounts to help parties in the sector transact digital assets through exchanges; under the new rules, financial institutions will no longer be allowed to operate virtual accounts for that purpose.
Six South Korean banks to roll out the new system
The FSC announcement states that six commercial banks — including Shinhan Bank, KB Kookmin Bank, Industrial Bank of Korea, and NongHyup Bank — will start using the new system from January 30. The system was initially planned to launch on January 20. The service is intended for holders of existing virtual accounts, the regulator’s spokesperson said.
Authorities adopted the measure to combat money laundering. It will also enable South Korea’s tax authorities to monitor local investors active in the cryptocurrency sector.