KBank, the prominent digital-only bank in South Korea and exclusive banking partner for the crypto exchange Upbit, is collaborating with Ripple to test on-chain cross-border remittances. Following the completion of the first phase of a proof-of-concept using a wallet-based remittance system, the two companies are now in the second phase, evaluating the stability of on-chain transfers to countries such as the United Arab Emirates and Thailand.
KBank is utilizing Palisade, Ripple's software-as-a-service wallet acquired as part of its $4 billion investment in crypto-related ventures. Traditional international bank transfers often rely on correspondent banking networks like SWIFT, which can take several days to settle and incur cumulative fees at each intermediary.
In contrast, on-chain remittances enable direct fund transfers across a blockchain network, settling in minutes with fees paid solely to the network. The partnership aims to assess whether KBank can leverage this approach to enhance speed, cost, and transparency for its remittance customers. Additionally, KBank is preparing for impending stablecoin regulations in Korea, with plans to continue technical verification of remittance use cases for stablecoins as the regulatory framework develops.
Under current Korean regulations, crypto exchange users are required to link a verified bank account before trading, with each major exchange paired exclusively with one bank. KBank holds a monopoly position with Upbit, the country's largest crypto exchange, which has contributed to the growth of its user base from approximately 2 million in 2020 to 15 million by the end of 2025. As South Korean lawmakers finalize the Digital Asset Basic Act, a comprehensive crypto regulatory framework, major financial institutions in Korea have been establishing infrastructure deals with global blockchain companies.
Korea boasts one of the most active retail crypto markets globally, with daily trading volumes on local exchanges often surpassing those of mainstream stocks during peak periods. Banks operating in this market are positioning themselves to handle the anticipated corporate and cross-border activity following the formalization of regulations regarding stablecoins, custody, and tokenized assets under Korean law.