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) $51,983.00 (+3.14%)
  • Ethereum (eth) $1,669.50 (-0.33%)
  • Binance Coin (bnb) $262.91 (-3.15%)
  • Tether (usdt) $1.01 (+1.40%)
  • Cardano (ada) $1.08 (+2.08%)
  • Bitcoin (btc) $51,983.00 (+3.14%)
Feb 25, 2021 (Thursday)
12:54
BTC Surges by 1.08% Within 5 Mins, Marking 51,079.96 USDT
10:21
FTX Now Launches ENJ Spot And Perpetual Contract
10:20
BTC Drops by 1.03% Within 5 Mins, Marking 48,832.28 USDT
10:00
ETH Tops List Of Crypto Net Outflow With $317.07 Mln In Past 18 Hours
09:31
Coinbase Says It Holds Bitcoin On Its Balance Sheet
09:08
BTC Drops by 1.02% Within 5 Mins, Marking 49,334.9 USDT
09:04
CoinNess DeFi Report: Assets Locked In DeFi Mark $54.51 Billion
08:51
Wing Finance: WIP-28 Passed
08:27
Former MLB Star Sells $1M Worth Of NFTs In One Minute
08:26
Mt. Gox To Determine Voting Rights Holders On March 24
07:58
Enzyme Finance Announces Next Release 'Sulu'
07:20
Infura: We’re Ready For The Berlin Fork
07:16
Germany’s Solarisbank Launches Licensed Crypto Brokerage API
06:30
New Crypto Rules In Thailand Could Require Traders To Show Income Before Opening Trading Accounts
06:25
Blockchain-enabled data indexing project The Graph announced the integration with underlying blockchain Fantom.
06:20
SOBA Platform Pre-booking Event, 300K SOBA Tokens Rewarded
06:16
24H Trading Volume Of Uniswap Tokens Marks $1.09 Bln
06:14
Effective Hashrate Of Filecoin's Entire Network Marks 2.761 EiB
05:36
BTC Surges by 1.07% Within 5 Mins, Marking 50,119.23 USDT
04:14
BTC Contracts See Longs Accounting For 48.82% In The Past 4 Hours
Subscribe to the TokenPost newsletter!
Don't show me this again today.
Back to top
Copyright ⓒ TokenPost. All Rights Reserved.
PUBLISHsoft