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South Korea’s Kakao to Integrate Cryptocurrency For 12,000 Merchants & Millions Users

Last Updated March 4, 2021 5:05 PM
Joseph Young
Last Updated March 4, 2021 5:05 PM

Asia Business, an influential finance-focused media outlet in South Korea, has reported that Kakao, one of the two largest internet companies that operate KakaoTalk, KakaoPay, KakaoStory, KakaoTaxi, and a subsidiary company which runs major cryptocurrency exchange UpBit, will integrate cryptocurrency within 2018.

Importance of Kakao

An exclusive coverage released by Asia Business revealed that Kakao’s fintech application KakaoPay, which registered 3 million users within its debut month, will integrate cryptocurrencies into its local application to allow users to send and receive cryptocurrencies. Kakao is also planning to launch its own cryptocurrency, similar to the model of Binance’s Binance Coin, within this year.

Once KakaoPay integrates cryptocurrencies like bitcoin and Ethereum, all the other Kakao apps would become  compatible with cryptocurrency payments. If Kakao pursues its plan to integrate cryptocurrencies into KakaoPay by the end of 2018, millions of KakaoTaxi, KakaoTalk, and other Kakao applications will soon be able to utilize cryptocurrencies.

Last year, Dunamoo, a subsidiary company of Kakao, launched UpBit, the first cryptocurrency-only exchange in South Korea. Within a few months, UpBit became one of the top five cryptocurrency exchanges in the market. Dunamoo’s launch of UpBit is considered by analysts as the first move Kakao made to enter the cryptocurrency market.

The massive success of UpBit and the rising demand for cryptocurrency from local investors likely led Kakao to focus on addressing the market, given that other companies like Bithumb have already secured large partnerships with the country’s largest e-commerce platforms and retailers in WeMakePrice and Yeogi Eottae to integrate cryptocurrencies into their existing payment infrastructures.

Kakao’s market penetration in South Korea exceeds the 90 percent mark, in all three areas: messaging, taxi service, and fintech. KakaoPay is the most dominant fintech application in the local market, and it is used by many millennials as an alternative to the South Korean banking system, as KakaoPay offers loans and provides virtual bank accounts, apart from settling both small and large transactions.

The integration of cryptocurrency by Kakao will immediately expose bitcoin, Ethereum and other cryptocurrencies to tens of millions of people that utilize Kakao on a daily basis. Kakao’s dominance in the South Korean market has come to a point in which devices like smartphones come with Kakao applications installed.

Increasing Adoption

As CCN.com reported, South Korea’s largest hotel booking platform Yeogi Eottae has already secured a partnership with the country’s biggest cryptocurrency exchange Bithumb to integrate cryptocurrencies.

Bithumb has started to supply cryptocurrency kiosks to many restaurants, cafes, and food franchises in South Korea, to increase the adoption of cryptocurrency and provide a better way for South Koreans to spend cryptocurrencies casually, on a daily basis, without technical issues.

With Japan’s leading retailers like Bic Camera, airline Peach, hotel chain Capsule, and electric grid operator Bitpoint integrating cryptocurrencies, the decision of major South Korean businesses to adopt cryptocurrencies will likely lead to a surge in growth in the Asian cryptocurrency market in the mid-term.