S. Korea to Refuse to Issue CBDC

Bank of Korea believes that CBDC issue could reduce the effectiveness of traditional instruments of monetary policy

19 June 2018 583

Bank of Korea (BoK) opposed the idea of launching its own cryptocurrency (CBDC), which, according to the regulator, could reduce the effectiveness of traditional instruments of monetary policy. This reported by Coindesk..

According to BoK, the sudden issue of CBDC into the economy "will cost society dearly and will do moral harm", and will also have a negative impact on monetary policy and, possibly, will cause instability in the financial market.

In general, the regulator believes that "digital currencies do not function like money."

Our thoughts are that digital currencies have been exposed to various categories of risk associated with credit, liquidity and legal management. [...] It's desirable that the BoK is the only entity to entirely control the issuing of money. Technology improvements don't mean private sectors will be allowed to have the rights for money issuance. If this happens, the BoK should regulate them but properly.

Kwon Oh-ik

Economist, BoK

Also, BoK said that it wants to retain a monopoly on the implementation of monetary policy.

At the same time, the Central Bank does not reject the possibility of issuing CBDC in the future. The regulator recognizes that cryptocurrencies can revolutionize the banking system. But before giving digital assets the full right to life, they must be thoroughly tested.

Blockchain

South Korea to Invest $1B in Blockchain Startups

Blockchain is a revolutionary technology and an integral component of the Fourth Industrial Revolution, local authorities believe

19 February 2019 103

Until 2022, Seoul authorities are investing 1.2 trillion South Korean won ($ 1.07 billion) in fintech startups working with distributed ledger technology. This is reported by CoinDesk.

Funds will be allocated for the development of new technologies through the Seoul Innovation Growth Fund, created last year by local authorities. The foundation will support startups working on various solutions, including those that are in the early stages.

In the first half of this year, the Fund will allocate 13.25 billion won ($ 11.75 million) and 8.4 billion won ($ 7.45 million) in the second half of 2019. For the Korean authorities, the blockchain is a revolutionary technology and an integral component of the Fourth Industrial Revolution.

The officials also noted that the average investment per start-up at an early stage of development in South Korea is almost seven times lower than, for example, in Silicon Valley.

Last fall, Seoul authorities submitted a five-year development plan for the blockchain industry.