Bank of Korea Governor Rhee Chang-yong said that the benefits of South Korea becoming the leader in issuing central bank digital currencies are minimal. He added that there’s no desire to issue a central bank digital currency (CBDC) before the United States and European countries. Meanwhile, South Korea will test CBDC with vouchers.
Bank of Korea Will Delay Issuing CBDC
During the seminar on CBDC, Bank of Korea Governor Rhee Chang-yong he doesn’t think launching a CBDC before the United States and European countries is good for South Korea. Thus, the central bank of South Korea will not issue CBDC before others despite multiple efforts related to research and study of central bank digital currencies.
Furthermore, the Bank of Korea, Financial Services Commission, and Financial Supervisory Service revealed that people will be able to test CBDCs with vouchers as part of a pilot test plan.
For retail, 100,000 people will be able to test CBDC using the public vouchers in the fourth quarter of 2024. Currently, state and local governments issue public vouchers for subsidies. Banks will publish certificate of deposit (CD) tokens, which serve as digital vouchers.
The CBDC is a new form of digital money issued by a central bank. Equivalent to the state currency, it can serve as digital payment divided into two types: the wholesale CBDC for institutions and the retail CBDC for individuals.
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Burgeoning Crypto Regulatory Landscape
The Bank of Korea and Korea Exchange are planning to simulate using the CBDC for carbon credit trading on a distributed ledger. Other tests include the issuance of tokenized assets and settlements through security tokens.
The crypto landscape is flourishing in the country after the government introduced a regulatory framework. However, there was some tightening too after the Terra-LUNA crisis in 2022. Despite all recent events, the government remains supportive of the crypto landscape in the country.
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