Korean-language blockchain news outlet Blockchain Today asks whether the Bank of Korea (BOK) really will launch its own central bank digital currency (CBDC).
The bank is probably considering it, at the very least, given how it will put together a team to research the matter. The BOK also recently announced that it was actively talking with international bodies such as the BIS to get an understanding of how other central banks were developing national digital currencies.
According to Blockchain Today, CBDC’s have much to recommend them. They could be a means for making freer transactions or a stable means for storing value. They would also contribute to reducing the use of paper money, a goal of most central banks.
On the other hand, CBDCs could replace decentralized digital currencies. If CBDCs prove successful, it could limit the use of decentralized cryptocurrencies and give central banks more power within the financial industry. And since no developed countries have actually launched a national cryptocurrency, we lack precedences upon which to predict probable outcomes.
Blockchain Today says Korea could — operative word — become the first nation in the world to actually issue a CBDC. To do that, though, the BOK would need to conduct market research and other analysis to determine whether there was enough domestic demand for such a currency.
As we’ve reported here, the BOK has seemingly warmed a bit to the idea of a CBDC, though the bank continues to deny it has actual plans to issue one.
While a CBDC could bring greater efficiency and other benefits to the financial system, it would do little to improve freedom and privacy. Seemingly, this would be good news for the decentralized currencies against which CBDCs would presumably compete.
Also in the Korean blockchain space…
- Bithumb invests $8M in South Korea’s regulatory sandbox
(By Steve Kaaru, Coingeek, Jan. 13)
Korean cryptocurrency exchange Bithumb is reportedly considering investing KRW 10 billion, or about US$8 million, in Busan’s blockchain special zone. The exchange will discuss the investment plan with the Financial Services Commission from the end of the month. Bithumb could use the investment to launch blockchain-based financial businesses in Busan.
- South Korea Moves Toward Institutional Acceptance of Cryptocurrency
(By Landon Manning, Bitcoin Magazine, Jan. 9)
Yes, we wrote about it last week, too, but here’s Landon Manning’s take on it. Money quote: “Given the way that the PCFIR referenced the international crypto industry, specifically claiming that “it is no longer possible to stop crypto-asset trade” worldwide, commentators have drawn attention to China’s test phase of developing its own state-backed crypto asset: the digital yuan. The Chinese economy being a significant competitor to South Korea’s in a wide range of areas (and also considering China’s support for North Korea) adds validity to this notion that South Korea has a rivalry with the economic giant in mind in its own approach to formal crypto adoption.”
- Ethereum dev indicted for delivering cryptocurrency talk in North Korea
(By Yessi Bello Perez, TNW, Jan. 9)
Ethereum developer Virgil Griffith has been formally indicted with one count of conspiracy to violate the International Emergency Economic Powers Act. Griffith was arrested at LAX last November after speaking at the Pyongyang Blockchain and Cryptocurrency Conference in North Korea. Federal prosecutors accuse him of providing to North Korea highly technical information despite knowing that the information could help Pyongyang launder money and evade international sanctions.