Copy link
Increase text size
Decrease text size
Link copied

Bank of Korea’s explores central bank digital currency in new report

Image: Yonhap)

Fri, 08 Feb 2019, 09:26 am UTC

Researchers at the Bank of Korea (BoK) have published a study that looks into effects of central bank digital currency (CBDC) issuance on financial stability.

The study examined the implications of CBDC for financial stability using a model in which commercial bank deposits compete with the central bank deposits in CBDC account and public could access CBDC via direct deposit at the central bank.

According to the report, introducing deposits in CBDC account would decrease the supply of private credit by commercial banks. This, in turn, would raise nominal interest rate, thereby lowering a commercial bank's reserve-deposit ratio.

“This has negative effects on financial stability by increasing the likelihood of bank panic in which commercial banks are short of cash reserves to pay out to depositors,” it said.

“However, once the central bank can lend all the deposits in CBDC account to commercial banks, an increase in the quantity of CBDC which does not require reserve holdings can enhance financial stability by essentially increasing supply of private credit and hence lowering nominal interest rate.”

Last year, Christine Lagarde, the head of the International Monetary Fund (IMF), had said that central banks should start considering issuing digital currencies. Central bank digital currencies or CBDCs could help prevent “too much power [falling] into the hands of a small number of outsized private payment providers,” she said.

Recently, the Bank of Thailand (BOT) completed the first phase of a project focused on domestic wholesale fund transfer using wholesale CBDC. “The results of Project Inthanon Phase I indicated that DLT can fulfil basic payment functionalities,” the BOT said, adding that the technology “demonstrated capabilities to help enhance payment efficiency and to support interbank transfer and settlement during off-hours.”

<Copyright © TokenPost. All Rights Reserved. >

To leave a comment, please sign in.
More
  • Bitcoin (BTC) $9,526.38 (-1.47%)
  • Ethereum (ETH) $236.09 (-2.65%)
  • XRP (XRP) $0.224600 (+0.84%)
  • Bitcoin Cash (BCH) $242.58 (-3.00%)
  • Bitcoin SV (BSV) $194.95 (-2.80%)
  • Bitcoin (BTC) $9,526.38 (-1.47%)
Feb 21, 2020 (Friday)
12:01
Paxos launches blockchain-based securities settlement solution with Credit Suisse and Instinet
12:00
Brazil to launch new payment system in response to cryptocurrencies
11:59
Digital currency exchange Coinbase Pro lists Kyber Network token
11:57
Norwegian Air to soon start accepting crypto payments
10:21
Swedish central bank begins CBDC pilot with Accenture
09:51
Italian soccer team Juventus launches ethereum-based digital collectibles with Sorare
Feb 20, 2020 (Thursday)
14:16
Telecom companies complete cross-carrier mobile payments using blockchain
11:53
National Stock Exchange of Australia to develop DLT-based digital securities trading platform
11:00
South Korean ICO project discontinued, to return $7.5M to token holders
10:36
Samsung maintains crypto support in soon-to-launch Galaxy S20
09:41
BIS appoints Innovation Hub heads to lead Singapore and Switzerland
09:15
Coinbase becomes first crypto company to receive Visa principal membership
08:59
Dubai Economy and six banks launch KYC Blockchain Consortium
08:26
Crypto Technicals: ETH/USD under downside pressure after 'Bearish Engulfing' pattern
07:12
Tim Draper buys $1M worth of Aragon Tokens to create digital courts for DAOs
06:13
Renewable energy firm Acciona commits to take CBI’s blockchain-based carbon credits trading platform global
05:02
Crypto Technicals: BTC/USD trades below 21-EMA, break below 4H 200 MA (9386) to trigger further downside
04:56
Crypto exchange Coinfloor to launch a simplified bitcoin buying service
04:35
Indonesia’s customs department joins IBM- Maersk blockchain shipping platform “TradeLens”
Feb 19, 2020 (Wednesday)
12:46
Crypto custodian BitGo acquires digital securities startup Harbor
Subscribe to the TokenPost newsletter!
Don't show me this again today.
Back to top
Copyright ⓒ TokenPost. All Rights Reserved.
PUBLISHsoft