New South Korean Law Requires Crypto Deposits to Pay Interest

South Korea's new law will require banks to pay interest on deposits at cryptocurrency exchanges, which could severely impact KBank's profits. KBank currently has $3.6 billion in deposits from major cryptocurrency exchange Upbit, accounting for more than 20% of its customer balances. Under the new law, if interest rates were set at 1%, KBank would have to pay about 50 billion won ($36 million) in interest, which is equivalent to its current profits. The timing of the law, which will take effect in July 2024, is particularly bad for KBank as it prepares to go public. Upbit is South Korea’s largest cryptocurrency exchange and other South Korean banks do not have significant exposure to cryptocurrency deposits.