The Bank of Korea (BOK) expressed its interest in introducing a Central Bank Digital Currency and guidelines on the cryptocurrencies within the first half of this year. The bank has also stated that a trial test would be first conducted before launching the digital currency.
Bank of Korea (BOK) considering a central bank digital currency (CBDC)
According to the local media source, the Bank of Korea (BOK) is planning to issue a central bank digital currency (CBDC) and to further announce the guidelines on cryptocurrencies within the first half of the year itself.
The bank stated on Wednesday:
“A taskforce has been studying the possibility of issuing a CBDC and how digital currencies will influence the country’s overall financial sector since January. We will announce updates on this issue by the end of June.”
Given the complex nature of cryptocurrencies, the bank is currently in the early stages of studying the CBDC. However, the bank also mentioned that it is too soon to say if it will be issuing its own digital currency, though the related global developments are on their radar.
BOK further mentioned that trial tests need to be run before actually introducing them as these are “unchartered waters”.
The media source also quoted a senior economist at Samsung Economic Research Institute: “The critical factor that magnifies the way a market moves is sentiment. This is most important as a market could be pushed ahead by sentiment. The BOK’s interest in digital currencies isn’t that new, and is good in terms of market sentiment.”
While on one side the Bank of Korea is significantly interested in digital currencies, the government has imposed strict regulations on crypto trading that involves identification checking procedures.
Korea, which used to be the most active cryptocurrency market experienced a huge loss after the government’s crackdown. However, the regulatory bodies haven’t reached a consensus on crypto regulation yet as stated by the Minister of Government Policy Coordination, Hong Nam-Ki.
According to The Korea Times, Nam-Ki said it is still debatable if crypto trading on exchanges will be banned or made mainstream.
Local cryptocurrencies are the new norm
Countries or central banks coming up with their own virtual currencies isn’t anything new as seen recently in Iran’s situation which announced that their native experiment digital currency is ready despite the ban on crypto trading by the country’s Central Bank.
A few weeks earlier, India’s central bank, RBI barred all of its registered entities from providing services to crypto businesses and expressed interest in introducing its own digital currency.
South Korea isn’t new to planning its own cryptocurrency as its capital Seoul also mentioned at the beginning of this month that they are developing their own digital currency called S-coin that will be used for social benefit programs.
What do you think of Bank of Korea planning to launch its own digital currency? Let us know your thoughts in the comment section below!
Having a background in writing, I worked on a wide array of industry topics and have recently entered the world of Blockchain and Cryptocurrency.