Bitcoin to be tested for digital wallets at South Korean bank

HONG KONG: Bitcoin may be about to take another step toward mainstream acceptance as South Korea’s biggest bank by assets prepares to embrace the cryptocurrency.

Shinhan Bank is in the process of selecting a company to test a bitcoin vault and wallet platforms. Subject to the regulator’s approval, the service is likely to be launched by mid2018, said an official at the lender who asked not to be named due to company policy.

The move comes as CME Group Inc and the Chicago Board Options Exchange look to establish bitcoin futures, and as the cryptocurrency continued to surge toward the US$10,000 mark.

Shinhan posted a bid invitation on its website earlier this month. It plans to develop a test server for the vault service to store the cryptocurrency safely, a mobile application to use the service, and statistical and analytical tools.

“Since there were some hacking cases, if we have this vault service in place, it will boost safety among investors,” said Park Noksun, a Seoul-based analyst at NH Investment & Securities Co. Park said the plans for bitcoin futures are driving demand because they could boost the cryptocurrency’s status.

South Korea, Asia’s fourth biggest economy, is the world’s most Internet-connected society. It has the highest proportion of users at 94%, and is also number one for smartphone ownership at 88%, according to the Pew Research Center.

Prime Minister Lee Nak-yon said yesterday that cryptocurrencies are causing speculation that can create a “pathological social phenomenon”. This comes a day after Finance Minister Kim Dong-yeon said the government is considering taxes on cryptocurrencies.

Shinhan’s bitcoin plan was first reported in South Korea last week by local media including Digital Daily, and Park said the news may have contributed to the rally. Bitcoin touched a new record of US$9,887.33 yesterday.