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 873

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.

Ethereum Blockchain

Potentional Vulnerabilities Found in ETH 2.0

Least Authority have found potentional security issues in the network P2P interaction and block proposal system

26 March 2020 964

Technology security firm Least Authority, at the request of the Ethereum Foundation, conducted an audit of the Ethereum 2.0 specifications and identified several potential vulnerabilities at once.

Least Authority said that developers need to solve problems with vulnerabilities in the network layer of peer-to-peer (P2P) interaction, as well as in the block proposal system. At the same time, the auditor noted that the specifications are "very well thought out and competent."

However, at the moment there is no large ecosystem based on PoS and using sharding in the world, so it is impossible to accurately assess the prospects for system stability.
Also, information security experts emphasized that the specifications did not pay enough attention to the description of the P2P network level and the system of records about Ethereum nodes. Vulnerability risks are also observed in the block proposal system and the messaging system between nodes.

Experts said that in the blockchains running on PoS, the choice of a new block is simple and no one can predict who will get the new block. In PoS systems, it is the block proposal system that decides whose block will fall into the blockchain, and this leads to the risk of data leakage. To solve the problem, auditors suggested using the mechanism of "Single Secret Leader Election" (SSLE).

As for the peer-to-peer exchange system, there is a danger of spam. There is no centralized node in the system that would evaluate the actions of other nodes, so a “malicious" node can spam the entire network with various messages without any special punishment. The solution to this problem may be to use special protocols for exchanging messages between nodes.