South Korea Central Bank Rejects Fiat-Backed Cryptocurrency Calls

South Korea will not be joining other countries in developing a fiat-backed cryptocurrency. The country’s de-facto central bank says it has no plans to authorize its use, even as the country remains home to one of the thriving cryptocurrency marketplace in the world.

BOK Fiat-Cryptocurrency Blow

The decision by the regulator follows the completion of a study that sought to ascertain the viability of cryptocurrencies in the economy.  The study analyzed the viability of a central bank digital currency that people have been calling for.

Crypto enthusiasts, as well as high profile personalities, have in the recent past, ramped up campaigns urging central banks to unveil fiat-backed cryptocurrencies. IMF president Christine Lagarde is on record urging central banks to consider their stance on cryptocurrencies.

However, as it stands, Bank of Korea is not yet ready to buy into the idea.

“We have no plans to issue any type of CBDC that is available for all people in the near future,” an unnamed BOK official said in a briefing. We have to work further on benefits and costs of CBDC implementation first,” said an unnamed BOK official said in a briefing.

The final report presented to BOK clearly stipulates that there is no urgent need for a central bank digital currency.  South Korea is home to one of the thriving cryptocurrency market thanks to government regulation of the sector.

In addition, cryptocurrency exchanges in the country have taken the necessary steps to regulate cryptocurrency activities. For instance, Bithumb, Upbit, and Corbit have joined forces to share real-time wallet information as a way of combating any suspicious activity linked to money laundering.

Mixed Fiat-Cryptocurrency Stance

South Korea is not the first country to turn down the opportunity of unveiling central bank controlled cryptocurrency. The U.S Federal Reserve is also inclined against the push even as cryptocurrencies continue to march into the mainstream sector.

In contrast, Sweden and Tunisia are leading the pack when it comes to the creation of fiat-backed cryptocurrency. The two are reportedly working on a national cryptocurrency that will help support the financial systems.

Venezuela, on the other hand, has unveiled an oil-backed cryptocurrency. After suffering the full force of economic sanctions from the U.S, the country sought reprieve on cryptocurrencies as it sought to participate in international trade. Iran is another country developing a government-backed cryptocurrency as it also attempts to circumvent economic sanctions propagated by the U.S.