South Korea’s Kookmin Bank Launching Crypto Investment Product

Kookmin Bank of South Korea has announced that it has now set up a Digital Asset Management Preparatory Committee, ahead of the impending launch of its digital asset investment products. The firm says the committee will focus on determining the product and strategy capabilities of cryptoassets and artificial intelligence investment funds, as well as the associated risks and compliance issues, according to reports on February 21, 2022.

South Korea’s Top Lender Eyes Crypto

Kookmin Bank (KB) is on the verge of rolling out a crypto-based investment product for retail investors in the region. KB Asset Management operates under the umbrella of KB Financial Group, which is presently the largest lender in South Korea, with more than $520 billion in assets under management, 

In a bid to make its digital assets play successful, the Seoul-based financial institution has floated a Digital Asset Management Preparatory Committee, which it says will be dedicated to evaluating product and strategy capabilities of digital assets and artificial intelligence investment funds.

Per sources close to the matter, KB is seriously considering launching crypto exchange-traded funds (ETF) as well as futures products, and the new committee created by the bank will be in charge of assessing risk and compliance issues for the funds.

Commenting on the development, Honggun Kim, KB’s Head of Index Quant Management said: “We will launch a virtual asset-themed equity fund and more. We plan to publish periodicals as well.

KB Blazing the Trail

If all goes as planned, the government-owned KB Bank will become the first commercial lender in South Korea to launch retail-focused crypto investment products in the state, as local regulations bar Korean banks from directly offering cryptocurrency trading services to their clients.

However, these lenders can only provide indirect crypto services through strategic alliances with bitcoin trading venues such as KB Bank’s KODA, which offers users crypto custody services. 

Notably, the KB team is setting its sights on rolling out a cryptocurrency investment index fund and a fund that will use an Outsourced Chief Investment Officer (OCIO or outsourced investment management) such as Fidelity Asset Management, to provide investors with guarantees on their capital. 

It’s worth noting that this is not the first time KB is venturing into the world of bitcoin (BTC) and other cryptocurrencies. In January 2020, the lender filed a trademark application with the Korean Intellectual Property Office to roll out its crypto custody solution.

And in August 2020, KB joined forces with Cumberland Korea, a digital assets trading company in the country, and blockchain venture fund, Hashed, to launch its bitcoin custody service.

While regulators in the United States have since given banks the go-ahead to offer cryptocurrency custody services to their clients, the country is yet to welcome its first spot bitcoin (BTC) ETF.

In related news, earlier in January 2022, Shinhan Card, an affiliate of Korea’s Shinhan Bank announced the launch of a new feature dubbed My NFT, a service designed to enable customers to mint their own crypto-collectibles also known as non-fungible tokens (NFTs).