Bank Of Korea Thinks On Launching Its Official Cryptocurrency

The Bank of Korea, the central bank in South Korea, could issue a bank-specific cryptocurrency (CBDC) as part of a series of guidelines for the cryptocurrencies market which will be announced next June. The information was disseminated in the local media on May 2nd following an announcement made by the Bank.

In this regard, the publication expresses the concern of some economists with the news, as the sudden and extensive launch of an official Bank of Korea cryptocurrency would revolutionize the way in which central banks provide money to the financial system. A measure that analysts believe could destabilize traditional lenders and spur rapid bank runs, especially in periods of financial instability.

South Korea Vs. Cryptocurrencies – The very definition of “contradiction”

This interest of the Bank of Korea in issuing its own cryptocurrency is curious, as it starts just in the context of a fall in the cryptocurrencies market trade sector in this Asian country, despite the spectacular boom in 2017.

Precisely, this drop in the growth of cryptocurrency trading in South Korea is due to a series of regulations imposed by the South Korean government. These regulations included greater supervision and control over cryptocurrency exchanges in the country, total prohibition of initial currency offers (ICO), taxation of holding and trading cryptocurrency, and restrictions on the import of mining equipment.

However, according to most government spokespersons’ statements, both the previous regulatory measures and the possibility of issuing a Bank of Korea official cryptocurrency are part of the same plan to be presented in June 2018.

However, there are some contradictions. The publication mentions the words of South Korea’s Minister of Policy Coordination, Hong Nam-ki, who says they are still deciding how to regulate the cryptocurrency trading, confessing that they have not reached consensus.

The debate focuses on two opposing ideas, according to Hong Nam-ki’s statement.Namely, to ban cryptocurrency transactions within cryptocurrency exchanges, which in some ways is already implemented through existing controls, or to regulate exchanges as common use assets, which would be feasible if they were to issue a Central Bank of Korea official cryptocurrency.

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About the Author: Anna Galvez

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