The Bank of Korea (BoK) this week announced that it has no plans to issue central bank digital currency (CBDC), according to The Korea Times.
The central bank underscored its concerns relating to the issuance of CBDCs including its impact on monetary policy and implementation, cost to society, and moral hazard. According to the BoK, CBDCs could also destabilize the market as digital currencies do not currently constitute “money.”
Kwon Oh-ik, a researcher at the BoK economic research institute, said in a report:
"It's desirable that the BOK is the only entity to entirely control issuing money.
"We reviewed the possible feasibility of digital currencies as currency; however, our thoughts are that digital currencies have been exposed to various categories of risk associated with credit, liquidity and legal management. Digital currencies don't perform as money."
According to The Korea Times, the BoK stated that it does not have plans to allow private players issue currencies as it believes that the central bank should have "appropriate control" over financial conditions of lenders and consumers.
"Technology improvements don't mean private sectors will be allowed to have the rights for money issuance. If this happens, the BOK should regulate them but properly," he said.
