Central Bank Digital Currency
In all countries, central bank-issued currency is the basic means of payment and settlement for economic agents, including individuals, firms, and financial institutions. Central banks are responsible for using this central bank money to maintain the safety and efficiency of the payment and settlement systems.
Recently, the rapid digitalization of the economy has led to a growing demand for a digital form of public currency. This demand is evident in the private sector, where new payment instruments such as stablecoins have been developed and are already widely used in certain sectors.
In addition, international forums such as the Financial Stability Board (FSB) and the Bank for International Settlements (BIS) have been discussing the potential uses and implications of central bank digital currencies (CBDCs) for cross-border payments and other financial applications. As a result, many central banks are considering issuing CBDCs as a way to meet this demand and adapt to changing technological and economic conditions.
The Bank of Korea (BOK) has not yet decided whether or not to issue a CBDC. However, developing a CBDC is a complex process that involves a lot of planning and coordination among various stakeholders, such as government agencies, financial institutions, and technology companies. It typically takes several years to prepare for the launch of a CBDC. To this end, the BOK is conducting a series of research and experiments on possible forms and designs of a CBDC. More information on these efforts can be found on the following link.
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