South Korea’s central bank governor, Lee Chang-yong, is urging action on central bank digital currencies (CBDC), emphasizing that the development of CBDCs is now imperative and cannot be postponed any longer. The Bank of Korea has not yet made a decision on whether to issue a CBDC, highlighting that the process of developing a CBDC is intricate and requires careful planning.
In a speech delivered at the “2023 MOEF-BOK-FSC-IMF International Conference on Digital Money” in Seoul, held at the Four Seasons Hotel in Gwanghwamun, Lee Chang-yong emphasized the increasing importance of CBDCs, especially as stablecoins have begun to be issued. He highlighted that CBDCs are no longer just a theoretical research project but a practical necessity from the central bank’s perspective.
Governor Lee Chang-yong emphasized that if stablecoins become established as a digital payment method and gain widespread adoption, it raises questions about the stability of the financial system. This concern underscores the importance of central bank digital currencies (CBDC) as a means to maintain stability in the evolving digital financial landscape.
The recent growth of digital money has prompted discussions on the global stage. The 2023 MOEF-BOK-FSC-IMF International Conference, hosted by the Korean Ministry of Economy and Finance, the Bank of Korea, the Korean Financial Services Commission, and the International Monetary Fund on December 14 to 15, focused on the theme of Digital Money: Navigating a Changing Financial Landscape. The conference provided a platform for policymakers, academics, and market participants to discuss the opportunities and challenges arising from digital money.
South Korea to Priortize Innovation
Kim So-young, Vice Chairman of the Financial Services Commission, previously emphasized the importance of regulatory measures that strike a balance between investor protection and innovation, speaking at the same conference a day before Governor Lee Chang-yong’s address.
In the regulatory journey of South Korea, authorities enacted legislation earlier in the year to bring virtual assets under regulatory control. The aim is to establish a framework that ensures investor protection in the rapidly evolving digital financial landscape. This regulatory framework is scheduled to take effect from July 2024. The move signifies the commitment of South Korean authorities to create a regulatory environment that supports responsible innovation while safeguarding the interests of investors.
