RATE Group | Korea’s central bank has no plans for a central-bank cryptocurrency
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Korea’s central bank has no plans for a central-bank cryptocurrency

Korea’s central bank has no plans for a central-bank cryptocurrency

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  • The bank is taking a “wait-and-see” approach towards issuing a government-controlled currency.
  • It stated that the public direct access to a cryptocurrency could reduce commercial banks’ deposits and reserves.

The Bank of Korea (BOK) has stated that it is not planning on launching a digital currency anytime soon. Due to financial stability concerns, the central bank sees the adoption of something like this to be complicated. It’s taking a “wait-and-see” approach towards issuing a government-controlled currency or currently known as central bank digital currency (CBDC).

Earlier this year, researchers from BOK published a study, which modeled how a crypto national coin could affect liquidity at commercial banks. The bank stated that direct public access to such a cryptocurrency could decrease banks’ deposits and reserves, resulting in a cash shortfall. Hence, the policymakers are planning on strengthening their research on CBDC issuance.

The bank…

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