SEOUL, December 15 – The Governor of the Bank of Korea, Rhee Chang-yong, emphasized on Friday that the expeditious introduction of a central bank digital currency (CBDC) has become an urgent imperative for central banks globally.
Addressing a conference in Seoul centered on digital currencies, Governor Rhee Chang-yong expressed concerns regarding the impact of stablecoins on financial stability and the potential challenges they pose to the operational integrity of central banks.
Stablecoins, a category of cryptocurrencies pegged to assets or fiat currency, have experienced a surge in popularity. However, their vulnerabilities were starkly underscored last year by the dramatic collapse of TerraUSD and its associated coin, Luna.
Governor Rhee Chang-yong’s remarks underscore the growing recognition among central banks that the development and deployment of CBDCs are crucial in navigating the evolving landscape of digital currencies. The Governor highlighted the urgency of addressing these matters to ensure financial stability and maintain the effectiveness of central banking operations in the face of emerging challenges associated with stablecoins.
As the global financial landscape continues to witness the proliferation of digital currencies, central banks are increasingly acknowledging the need for strategic responses to safeguard monetary systems and address potential risks associated with new forms of digital assets. The Bank of Korea’s Governor’s statements reflect the pressing nature of these considerations as central banks worldwide grapple with the implications of digital innovation in the financial sector.
