Bank of Korea Governor Urges Rapid CBDC Introduction: Report

• Stablecoins' Growth Poses Central Bank Challenges Due to Their Unstable Nature
• Urgency for Central Bank Digital Currencies
• Stablecoins' Ability to Maintain Their Pegs
• Bank of Korea's Actions Towards CBDC
• Global Banking Regulator's View on Stablecoins

Stablecoins' Growth Poses Central Bank Challenges Due to Their Unstable Nature

The escalating prominence of stablecoins like tether (USDT) and USD Coin (USDC) presents obstacles for central banks. The Bank of Korea's Governor, Rhee Chang-yong, pointed out on Friday that these digital currencies often do not live up to their name of 'stability', as reported by Yonhap News.

Urgency for Central Bank Digital Currencies

Rhee emphasized the pressing need for central banks to contemplate the introduction of central bank digital currencies (CBDC), be it retail or wholesale. According to him, the widespread acceptance of these stablecoins could potentially reduce the importance of central bank money and undermine the effectiveness of financial policies.

Stablecoins' Ability to Maintain Their Pegs

Bank of Korea's Actions Towards CBDC

Rhee disclosed that the Bank of Korea is actively developing a CBDC pilot on a wholesale level and investigating its application in the tokenization of real-world assets, as Yonhap reported. The bank has previously stated its intentions to launch a retail pilot initiative involving 100,000 participants next year.

Global Banking Regulator's View on Stablecoins

In related news, the Global Banking Regulator has expressed a desire for more stringent criteria when granting stablecoins preferential risk treatment.

Edited by Jonathan Stoker