Crypto savings accounts attract massive deposits with high yields

(MK DB)

South Korean cryptocurrency exchanges are drawing in massive deposits by offering annual interest rates around 2 percent, surpassing the yields of traditional bank and brokerage parking accounts.

According to data compiled by Maeil Business Newspaper on Sunday, among Korea’s top five cryptocurrency exchanges (Upbit, Bithumb, Korbit, Coinone, and Gopax), Bithumb provides the highest interest rate at 2.2 percent, followed by Upbit at 2.1 percent.

Upbit has recently begun issuing interest payments daily, further boosting its appeal.

A comparison with the country’s ten largest securities firms—including Mirae Asset, Korea Investment & Securities, NH Investment & Securities, Samsung, KB, Meritz, Hana, Shinhan, Kiwoom, and Daishin—shows a stark difference.

Even under favorable deposit conditions, Samsung Securities offered the highest interest at 1.05 percent, while Korea Investment & Securities provided just 0.40 percent.

On average, the top five crypto exchanges paid deposit interest of 1.85 percent, more than double the 0.74 percent average at the top ten brokerage houses.

Industry insiders say the high rates reflect intense competition among exchanges to attract users.

Since the enactment of Korea’s Virtual Asset User Protection Act in July 2024, exchanges have begun offering interest on deposits. Despite four cuts in the base interest rate since then, crypto deposit rates have remained largely unchanged.

This situation is raising questions about sustainability.

From July 2024 to June 2025, the five major exchanges paid a combined 120.2 billion won ($86.6 million) in deposit interest. If the average rate was 2 percent, this suggests average deposits of around 6 trillion won during the period, with figures surpassing 10 trillion won since January.

These high rates are putting pressure on the partner banks managing the fiat accounts.

For example, K Bank cited Upbit’s increased deposit interest as a key reason for its weak first-quarter performance this year.

While exchanges are reportedly interested in lowering the rate, none want to make the first move.

In response to a parliamentary inquiry by Representative Choo Kyung-ho’s office on whether rates should be reduced following the Bank of Korea’s cuts, Upbit and Korbit issued cautious statements, noting they would “consult with partner banks.”

Gopax said that changes in the base rate significantly impact operational returns and that it “may have to reconsider the current deposit interest structure.”

“This has essentially become a game of chicken,” said a source at one crypto exchange. “No one wants to be the first to lower interest.”