South Korea Debates Scrapping 'One Exchange-One Bank' Rule for Crypto Firms

The South Korean government is set to debate a bill that would eliminate the 'one exchange-one bank' rule for cryptocurrency firms. The proposed amendment, part of the Act on Reporting and Use of Certain Financial Transaction Information, aims to allow virtual asset service providers (VASPs) to obtain real-name verified deposit and withdrawal accounts from one or more financial institutions.

The current rule, introduced in 2018, requires each exchange to partner with only one bank for these services. This has been criticized for limiting the ability of exchanges to scale their operations and negotiate favorable terms. The amendment would grant VASPs greater flexibility in securing banking partnerships, potentially leading to improved access to banking services for smaller exchanges.

Industry observers note that this move could enhance consumer choice by providing users with more options for deposit and withdrawal methods. However, some experts caution that the change could increase compliance complexity for both exchanges and banks, particularly regarding anti-money laundering (AML) obligations.