A large South Korean conglomerate is entering the Bitcoin remittance market. Dongbu Group is partnering with Bitcoin remittance service provider Sentbe via its savings bank subsidiary. The move follows the legalization of “micro” Bitcoin remittances by the Korean government.
Korean Conglomerate Working with Bitcoin
Established in 1969, Dongbu Group is a large global conglomerate in South Korea. The group produces industry, chemical, shipping, insurance and financial products.
One of its many subsidiaries, founded in 1972, is Dongbu Savings Bank. The bank announced this week that it has signed a Memorandum of Understanding (MOU) with the Bitcoin remittance company Sentbe. An official from the bank said:
We have been working on this business alliance to prepare for the fourth industrial revolution era under the traditional savings bank business.
South Korea-based Sentbe won a fintech award for its overseas remittance concept using Bitcoin in 2016. The service allows customers to send money to the Philippines, Vietnam, Indonesia, Japan, and China. It allows users to save up to 95% of the fees charged by traditional banks, its website detailed. The recipient will receive money within 24 hours.
“This MOU is aimed at securing joint business opportunities by exploring new business models based on new technology and expertise of the WSBI overseas affiliate network,” the announcement detailed.
WSBI, the World Savings and Retail Banking Institute, represents the interests of 6,000 financial institutions in about 80 countries worldwide. Dongbu bank became the first Korean savings bank to register as a full member of WSBI in 2003. Through the association, the bank works with many financial institutions worldwide including Sweden’s Swedbank and Germany’s Fra-Spa. In Asia, it works with Philippine Postal Savings Bank, Indonesia National Housing Bank, Sri Lanka National Savings Bank, Thai Government Savings Bank, Malaysian Savings Bank, and Uzbek Savings Bank.
Bitcoin Remittances Legalized in July
This partnership follows the amended Foreign Exchange Transactions Act, which went into effect on July 18. A senior researcher at Hana Institute of Finance, Kang Mi-jung, commented at the time that “domestic banks need to find ways to provide remittance services for simple and inexpensive fees, and to establish new profit models through partnerships with fintech.”
The new law legalizes Bitcoin foreign exchange transfers for small sums. Fintech companies wanting to provide such services must register with the country’s Financial Supervisory Service (FSS), and meet certain financial requirements. A paid-in capital of over 2 billion won, roughly $1.77 million, and a debt-to-equity ratio of below 200%, are examples of such requirements. There is a limit of $3,000 for each transfer and an annual limit of $20,000.
In accordance with the amended act, Sentbe is in the process of being approved as a “micro-foreign remittance business,” the bank revealed, adding that it is preparing to expand the market of micro-foreign remittances.
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Images courtesy of Shutterstock, Dongbu, and Sentbe
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