A UN Global Expert on blockchain has predicted that digital currencies could replace bank accounts as low-interest rates render the latter increasingly unattractive.
Massimo Buonomo, UN Global expert in blockchain, cryptocurrencies, fin-tech, green-tech and reg-tech, said CBDCs could render bank accounts unnecessary as low interest rates robs bank accounts of their remaining “killer app.”
“Low-interest rates, enforced by central banks to encourage more borrowing, may expedite the process, he said, as they incentivize account holders to hunt for returns elsewhere. The Bank of England, for example, is actively reviewing taking interest rates into negative territory, meaning savers would pay the banks to hold money in their bank accounts. U.S. President Donald Trump recently pushed for negative rates, calling them a ‘gift.’”
It quotes Buonomo:
“‘Those who are going to suffer the most [from digital currencies] are the credit card processing companies and the banks because, in the current interest rate environment, your [only] advantage of having a bank account is that it enables digital payments,’ he said.”
In South Korea, the Bank of Korea plans to launch a CBDC pilot program by the end of 2021, though the country’s well-developed digital payments system makes it likely that any CBDC issued would be aimed at financial institutions rather than individuals.
Meanwhile, the Bank of Korea slashed interest rates to a record low 0.5% at the end of May.
Also in the Korean blockchain space…
(By Ledger Insights, June 2)
The BMW Vantage program will provide services like reward points as coins that can be used for payments and discounts. It will “enable customers to use services across different sectors, such as mobility, travel, culture, and education through affiliates.” BMW will roll out the program globally after launching in South Korea.
(By Sebastian Sinclair, CoinDesk, June 3)
Binance Korea is integrating an AML solution by blockchain analytics firm Coinfirm into its digital asset exchange Binance Cloud. “Coinfirm’s AML and analytics platform is designed to assist compliance efforts, monitoring transactions and crypto addresses across around 1,400 blockchain assets and protocols, according to its own figures,” reports CoinDesk. “The product is utilized by companies ranging from financial institutions to cryptocurrency exchanges.”
(By Oh Dae-seok and Minu Kim, Pulse, June 4)
Kakao has launched its crypto wallet Klip, allowing its 50 million users to access 11 crypto and digital assets. “Kakao said on Wednesday Klip will be directly connected to Klaytn-based blockchain applications, which will help increase the number of compatible cryptocurrencies and digital assets to be stored in Klip,” writes Pulse. “Klaytn is a mobile blockchain platform launched by Kakao’s blockchain tech subsidiary GroundX last June.”