South Korea’s Central Bank has said that it currently has no plans of issuing a digital currency in the near future, according to a report by the local news outlet, The Korean Herald.
Cryptocurrency has become an important part of planning for many financial institutions and governments around the world and its importance is underlined by the fact that it was a topic of discussion at the World Economic Forum held in Davos.
However, South Korea’s premier financial institution has chosen to distance itself from the whole shift to cryptocurrencies.
After research conducted by the Bank of Korea on Central Bank Digital Currency (CBDC) regarding the possibility of issuing a cryptocurrency that is backed by the central bank or the government, it concluded that there is no urgent need for such implementation. The report was aimed at gathering legal and social data for the effective implementation of CBDC.
Citing the words of a bank official whose name was withheld, the bank said,
“We have no plans to issue any type of CBDC that is available for all people in the near future.”
However, even though the bank has confirmed that it won’t e issuing CBDCs anytime soon, it will still continue its research on the subject and keep gathering information pertaining to the costs and benefits of implementing the technology in the future. The bank official further said: “We have to work further on the benefits and costs of CBDC implementation first.”
It seems they are keen on taking a very measured and informed approach to CBDCs.
A number of banks have been considering a CBDC for a while now. Most central banks have come up with reasons why they wouldn’t support such innovation claiming the tech has yet to live up to the hype, however, a few have gone ahead to issue theirs.
Banks across the world have had mixed feelings regarding the subject. The Bank of Thailand wants to use a CBDC for internal bank transactions while speculations regarding Iran issuing a national digital currency to avoid sanctions arose very recently.
Regardless, one thing is certain, banks are settling for the idea of replacing current banking systems with distributed ledger technology, especially to reduce human error and improve transparency. The possibility of a digital currency from there shouldn’t be quickly dismissed.