Bank of Korea Governor Calls for Action on CBDCs

CBDC South Korea

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Tanzeel Akhtar

Journalist

Tanzeel Akhtar

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Tanzeel Akhtar has been covering the cryptocurrency and blockchain sector since 2015. She has written for the Wall Street Journal, Bloomberg, CoinDesk, Bitcoin Magazine and Bitcoin.com.

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December 15, 2023 06:11 EST

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South Korea’s central bank governor Lee Chang-yong is calling for action around central bank digital currencies (CBDC) which he says have become imperative and there is an urgency that can no longer be postponed.

The Bank of Korea has not yet decided whether or not to issue a CBDC and has stressed that developing a CBDC is a complex process that involves a lot of planning.

In his speech Chang-yong speaking at the “2023 MOEF-BOK-FSC-IMF International Conference on Digital Money” held at the Four Seasons Hotel in Gwanghwamun, Seoul he said, “As stablecoins have recently begun to be issued, CBDC is a research project that can no longer be postponed from the central bank’s perspective.”

Chang-yong stressed that “If stablecoins become established as a digital payment method and crowd – it is questionable whether the system will operate stably.”

In recent years there has been growth of digital money. The Korean Ministry of Economy and Finance, the Bank of Korea, the Korean Financial Services Commission, and the International Monetary Fund hosted the 2023 MOEF-BOK-FSC-IMF International Conference on December 14 to 15 under the theme of Digital Money: Navigating a Changing Financial Landscape.

The conference provided a forum to discuss opportunities and challenges from digital money with distinguished policymakers, academics, and market participants from around the world.

South Korea to Priortize Innovation

As reported earlier, Kim So-young, Vice Chairman of the Financial Services Commission, emphasized the need for regulations to strike a balance between investor protection and innovation. Kim spoke at the same conference a day before.

Reflecting on the regulatory journey in South Korea, authorities had enacted legislation earlier in the year to bring virtual assets under regulatory control, aimed at ensuring investor protection. This regulatory framework is slated to take effect from July 2024.