central bank of Korea

Need of CBDCs to Developed Countries

By the recent news you can see that digital currencies are being adopted by central banks around the world. This worldwide adoption of digital currency is really opening a door for cryptocurrency. But the Bank of Korea, the central bank of the Republic of Korea and issuer of South Korean won and the bank was established on June 12,1950,  is still confined to their traditional thought and they discouraged the idea of adopting a central bank digital currency or briefly CBDC.

As Korea belongs to an advanced economy, including advanced payment and settlement infrastructure, there is a seldom need of CBDC according to Hong Kyung-Sik, director of financial settlement at the central bank. The degree of their openness is also internationally high.

Through utilizing app as well as bank remittance, transfer of money can be done with low cost and quickly. They provide credit cards for easy buying. They have developed open banking. According to his commentary, major countries will hardly accept CBDC. He also said developed countries will adopt CBDC for tiny purposes like to avoid monopolization and to maintain the resilience of the relevant infrastructure.

But his commentary take a turn just in favor of developing countries and he said CBDC will be useful to improve inclusion and lower costs associated with the handing of cash like what China is doing with central bank digital currency to support monetary policy and help promote the internationalization of renminbi. He also told the central bank of Korea ought to promote and support innovation in payment and settlement to obtain a balance between efficiency and safety. He also said the institution will be discreet in adopting new solutions and along with that the central bank will monitor the development of CBDC and Blockchain-related technologies globally.

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