South Korean Banks ‘Won’t Follow Crypto Exchanges into Deposit Interest Rate War’
South Korean banks are refusing to follow the nation’s crypto exchanges into a “deposit rate war” as platforms scramble for market dominance.
Per Daehan Keumyoong Shinmun, banks think they have “no reason” to “become active” as leading crypto trading platforms try to outdo each other in a bid to win more customers.
Under the terms of the Virtual Asset User Protection Act, which came into force last month, crypto exchanges that offer crypto-fiat trading must store and manage their customers’ deposits in dedicated bank accounts.
The act also obliges exchanges to pay interest to their customers if they hold cash deposits. However, exchanges are free to adjust the level of the interest rates they offer their clients.
And this, in turn, has seen platforms try to win over more customers with ever-more competitive interest rates.
However, the media outlet reported that South Korea’s top banks “appear to be indifferent” to exchanges’ “deposit interest rate wars.”
An unnamed official at a South Korean banking group explained:
“Even if other businesses compete to sell products similar to bank accounts, there are inherent disadvantages, such as the fact that the Depositor Protection Act does not apply to them. In terms of brand awareness and trust in asset protection, banks still reign supreme.”
Interest rates on acquisition financing in S.Korea have dropped to the pre-pandemic level in the 5% range, paying the way for active M&A deals in the country. #bank_loans #interest_rates #Hyosung_Chemical #DIG_Airgas #DN_Solutions #Ecorbit https://t.co/pkc2XwbPw8
Another banker claimed that the Cost of Funds Index, the benchmark lending rate for mortgage loans, has “recently been on a downward trend.”
And this fact, the banker claimed, meant that it
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