South Korea’s central bank has announced that it will begin testing its own digital currency in the second half of 2021, but prefers not to rush to launch it.
Bank of Korea Governor Lee Ju-yeol said the regulator has long been considering such a possibility. In addition, he is encouraged to take this step by local regulators supporting the introduction of innovations. Yeol, however, believes that “it’s better to do things right, not quickly,” taking the same approach as the United States. Therefore, many experiments need to be done before the official launch of the digital won.
Meanwhile, South Korean bank Shinhan Bank is already ready to test the state digital currency, and last month unveiled a platform built specifically for this purpose. Yeol also clarified that the digital won should not be seen as a cryptocurrency, but as a digital version of regular money that will run on the blockchain.
The coming years could be significant in terms of issuing central bank digital currencies, as many of them are working hard to implement such projects. For example, China has already conducted several successful tests of the digital yuan, which has been well received by the local population. Russia is also preparing for experiments with the digital ruble, developing a regulatory framework for this.
However, most countries are still at the stage of discussing the concept of digital currencies. Opponents of launching such assets believe that state-owned cryptocurrencies will be centralized as they will be controlled by the central bank. Consequently, they will be exposed not only to the risks faced by centralized systems, but also to the risks of cyberattacks. And yet, with the proliferation of private stablecoins, many central banks see the need for massive adoption of their own digital currencies.
Recall that in October, the Central Bank of the Bahamas issued its own stablecoin Sand Dollar. Last month, the Central Bank of Saint Kitts and Nevis also joined the small ranks of “pioneering banks” by launching the digital currency DCash.
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