Bank of Korea official: China's central bank digital currency helps the internationalization of the renminbi

According to Coindesk, Hong Kyung-sik, director of financial settlement at the Central Bank of Korea, said at a conference this week that, like most advanced economies, South Korea has little demand for the central bank's digital currency. China's development of the central bank's digital currency will help the internationalization of the renminbi.

Hong said at the meeting, “In Korea, we already have advanced payment and settlement infrastructure. In addition, Korea’s international openness is also very high.”

He added that using an application-based solution to transfer money through banks, it is possible to transfer funds quickly, cheaply and securely in Korea, and can be effectively paid using credit cards. South Korea is also developing an open bank, and its API will allow seamless connections with financial institutions.

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Hong concludes that “the possibility that the central bank’s digital currency will become a reality in major developed countries is still small.”

Despite this, he admits that in developed countries, the central bank's digital currency may be used to achieve some very specific goals. For example, systems built in Scandinavia can avoid monopoly and maintain related infrastructure. Flexibility.

He mentioned that on the other hand, the issuance of central bank digital currencies in developing countries with poor financial infrastructure can help improve financial inclusion and reduce the costs associated with cash processing. Hong added that for China, the central bank's digital currency can support monetary policy and help promote the internationalization of the renminbi.

He said that South Korea's central bank will continue to study technology related to blockchain and focus on the development of central bank digital currency on a global scale, but added that the agency will be cautious in adopting new solutions. “Korean banks should promote and support innovation in payment and settlement. Every effort should be made to maintain a balance between efficiency and safety.”

The Bank of Korea has long been skeptical about the central bank’s digital currency, which in the past has expressed concern about its development. In an article published in February, the bank suggested that the central bank's digital currency could destroy commercial banks and exhaust their funds, thus undermining the stability of the banking system.

Image source: pixabay

By Liang CHE

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