Crypto.com, Gate.io Ink Deal to Help S Korean City Build ‘Digital Asets’ Exchange

Crypto Exchange South Korea

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Tim Alper

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Tim Alper

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Tim Alper is a British journalist and features writer who has worked at Cryptonews.com since 2018. He has written for media outlets such as the BBC, the Guardian, and Chosun Ilbo. He has also worked...

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June 26, 2023

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The South Korean city of Busan is inching closer to the launch of what could become the world’s first city-run crypto exchange – and has signed collaboration deals with the centralized exchange (CEX) giants Crypto.com and Gate.io.

The deals follow on the heels of similar agreements penned by the city in recent months with fellow crypto exchange heavy hitters Binance, FTX, and Huobi.

In a press release, the city explained that the Busan Mayor, Park Hyung-joon, had met with top executives from Crypto.com and Gate.io at a signing ceremony, where the former pledged to provide support for Busan-based blockchain technology startups. Gate.io, meanwhile, explained that it wanted to train 1,000 blockchain engineers per year in Busan as it seeks “mutual cooperation and investment” opportunities.

As part of the deal, the CEXs will provide the city with technological and infrastructure-related support as Busan looks to build what it calls the Busan Digital Asset Exchange.

The city has officially been a “blockchain regulation-free zone” for several years. But until recently, the central government had insisted that public blockchain, coin launch-related projects, and crypto-related business should be shunned in favor of closed, private blockchain-based alternatives.

The deal will also see both exchanges set up offices in Busan. The Binance, FTX, and Huobi deals also saw similar provisions made. Huobi already has a South Korean exchange, but it is yet to obtain the banking partnership deal it would need to open fiat KRW markets. Huobi Korea currently offers only crypto-crypto trading.

However, the high-volume South Korean crypto market is currently dominated by domestic players. The nation has strict licensing rules for domestic layers, and overseas exchanges – like Binance – have been told that they must not court South Korean customers before they obtain operating permits.

Will Crypto.com and Gate.io Gain a Foothold in the S Korean Market?

Establishing offices in Busan could well give the international exchanges a base in the country – allowing them to move quickly should the regulatory situation change. And such changes could well be in the cards: The nation’s President, elected earlier this year, has pledged to boost Busan’s blockchain credentials and help nurture the crypto sector.

While some may be concerned that the likes of Crypto.com, Gate.io, and the rest could pose an insurmountable challenge to domestic platforms – most of which are smaller startups – others will have been comforted by the international CEXs’ promises to support local companies.

Mayor Park was quoted as stating:

“This agreement brings Busan one step closer to becoming a hub of global digital finance.”