Bank of Korea Hiring Crypto Experts
The Bank of Korea has begun hiring digital currency and crypto assets experts indicating that the country’s national bank may begin developing CBDC technology to be issued directly from the bank.
Yesterday, the Bank of Korea hired a key piece of their research team in a PhD-level researcher responsible for digital innovation research in payment settlements. The workforce as a whole will study the underlying technologies related to digital payment and payment settlement programs that utilize digital currencies and cryptocurrencies.
The BOK has not yet definitively stated whether they are actively developing CBDC technology, however other major national banks around the world are showing serious interest in the endeavor. For example, the People’s Bank of China made a landmark announcement stating that they were developing a CBDC, and so is Canada’s central bank. Facebook’s Libra is also pursuing a similar platform, though lacking the backing of the United States Treasury.
The new initiative to hire more cryptocurrency and digital assets experts comes about a month after the bank’s Governor Lee Joo-yeol told executives of the bank that if they turn away from change, they risk losing the nation’s trust in them. He specifically named blockchain technology as one of those changes that needed to be addressed sooner than later.
Francois Villeau de Gallo stated in an interview that the French Bank would be exploring their options with a CBDC as well. His sentiment towards CBDC is rather open in the sense that they can be used to counter the private sector’s attempts to undermine national currencies.
In his words, “creating a CBDC would give us a powerful lever with which to assert our sovereignty in the face of private-sector initiatives such as Libra…”
The need for CBDC development was not much discussed even as late as the start of this year, but policy discussion and implementation has changed so rapidly that the possibility of reorganizing the BOK to include a CBDC may come as early as next year.
The benefit of CBDC’s include more efficient and faster cross-border remittances which would take a matter of moments rather than days to finally settle, and could be used a powerful policy tool by forcing a depreciation of the value of the CBDC in order to promote currency velocity.
This latest assessment by the BOK on the effects of and need for CBDC’s stands in stark contrast to a report published just 10 months ago where the bank stated the net effects of CBDC’s could be negative on the economy. Their suggested alternative at the time was “for the central bank to lend all the deposits in the CBDC account to commercial banks. In turn, commercial banks can lend more money to their customers, and the increase in the supply of retail credit reduces the likelihood of bank runs.” This could hypothetically improve financial stability.
