Crypto remittances overtake South Korean banks for first time

South Korean crypto exchanges now handle more cross-border remittance volume than the country's five largest traditional banks. The five biggest won-denominated exchanges recorded 163.55 trillion won ($125.8 billion) in transfers last year, a 380% jump from 34.02 trillion won in 2022, according to figures reported in local news.

The same banks grew their foreign-currency remittance business by 20% over the same three years, hitting 159 trillion won. The crossover is the first time crypto platforms have beaten banks on that metric.

Professor Hwang Seok-jin from Dongguk University pointed to fees as the main driver. Crypto remittance costs are lower than bank charges, and South Koreans working abroad plus traders in Southeast Asia and the Middle East are gravitating toward the cheaper option, he said.

Banks are joining, not fighting

Rather than push back, several big South Korean banks have bought in. KBank, the banking partner for Upbit, announced a partnership with Ripple and has finished testing a wallet-app-based remittance system. It is now working on stability checks in a virtual environment for transfers to the UAE and Thailand using Ripple's Palisade software.

Toss Bank, a digital lender with more than 15 million customers, signed a deal with Solana targeting faster settlement for cross-border payments.

Hana Bank committed roughly 1 trillion won ($720 million) for a 6.55% stake in Dunamu, Upbit's parent company. Hanwha Investment Securities got approval to increase its holdings. Samsung Securities, Samsung SDS and Samsung Card together acquired a 4% stake in the same platform. Future Asset Consulting signed to buy 92.06% of rival exchange Korbit.

Tiger Research surveyed 150 institutions and reviewed 196 cooperation cases. It found that the companies are competing for position around stablecoins, security token offerings, and custody services.

Regulation is stuck in a dispute

The National Assembly postponed debate on the Digital Asset Basic Act – South Korea's new legal framework for crypto – because of the June 3 local elections. Lawmakers are unlikely to revisit it until late this year.

The bill is hung up on a dispute between the Financial Services Commission (FSC) and the Bank of Korea (BOK) over stablecoin oversight. The BOK wants stablecoin issuers to operate as consortia where banks hold at least 51% ownership. The FSC says that would choke off fintech participation and favors a more flexible approach.

The two sides also disagree on reserve requirements, enforcement authority, and whether interest-bearing stablecoins should be allowed. Under the bill's current language, crypto firms would have to follow licensing and disclosure rules, insider trading and market manipulation would be banned, and a Digital Asset Committee would oversee policy. Companies would also need at least 50 billion won ($35 million) in capital before they could issue stablecoins.