South Koreas Central Bank against issuing a central bank digital currency

Friday 22 June 2018 10:37 CET | News

South Korea’s Central Bank (BOK) has announced it opposes the idea of issuing a central bank digital currency (CBDC).

The news follows a bank’s report which analyses the possibility of issuing a CBDC and also how digital currencies might influence Korea’s financial sector as a whole. The reason the BOK opposes a CBDC is because issuing one would change the basic mechanics of monetary policy and implementation and could also destabilize the market order as digital currencies don’t currently constitute money, as per the BOK’s definition.

Moreover, the BOK said that it might ban private sector players from issuing coins, because central banks should have ‘appropriate control’ over financial conditions. However, the report also indicated that CBDCs may ‘revolutionize’ the banking financial system, but before going live they would need to be thoroughly vetted and also accompanied by further regulation.

In March 2018, Bank of England chief Mark Carney has presented the bank’s view on cryptocurrency use, in a speech to the Scottish Economics Conference at Edinburgh University.

The bank has an open mind about the eventual development of a central bank digital currency (CBDC) and an active research programme dedicated to it. However, a true, widely available reliable CBDC does not appear to be a near-term prospect, given the current technological shortcomings in distributed ledger technologies, according to the bank’s representative.

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Keywords: South Koreas Central Bank, BOK, digital currency, crypto, banks
Countries: World