Bank of Korea Rejects Central Bank Digital Currency

 

 

 

After conducting a review of digital currency’s potential benefits as a central bank-issued currency, the Bank of Korea (BOK) has determined that it will not issue its own. Citing concerns about societal costs and the potential moral hazard, a recent BOK report suggested that the central bank should continue to have total control over the issuance of Korean currency.

According to the Korea Times, researcher Kwon Oh-ik wrote:

"We reviewed the possible feasibility of digital currencies as currency; however, our thoughts are that digital currencies have been exposed to various categories of risk associated with credit, liquidity and legal management. Digital currencies don't perform as money."

Moreover, the report suggested that the bank does not plan to allow anyone in the private sector to issue their own currencies either. The Times report noted that the BOK is determined to continue to exercise what it called “appropriate control” on all matters related to the “financial conditions of lenders and consumers.”

Kwon’s report acknowledged that the technology could have a revolutionary impact on financial systems but asserted that it would need to be carefully tested before that could happen. The author also warned, "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."

Author: Ken Chase

Freelance writer whose interests include topics ranging from technology and finance to politics, fitness, and all things canine. Aspiring polymath, semi-professional skeptic, and passionate advocate for the judicious use of the Oxford comma.

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