While many believe that Chinese digital fiat is around the corner, South Korea has ruled out issuing its own digital token, stating that digital currencies are still far off from actualization. In the private sector, however, the speed of banking innovation continues to intensify.
The Bank of Korea has said that there is “almost no need for a digital fiat in South Korea.” According to Newsis, the head of the institution’s financial service division Hong Kyung-sik echoed sentiments expressed by other global regulatory bodies who believe that central bank digital currencies (CBDCs) would be most effective in developing countries, and have no place in advanced economies.
Hong said, “Major countries are talking about CBDC issuance in the wake of Facebook’s Libra announcement, but it is unlikely that cash will completely disappear in the near future, and the possibility of CBDCs being issued soon is very slim indeed.”
He also insisted that S. Korea has no advanced payment and settlement infrastructure, including credit card providers and financial settlement networks.
“We also have a wide variety of payment methods available. As such, there’s little need to issue a CBDC.”
However, the South Korean private sector seems to be in a haste to adopt blockchain-powered solutions in the banking sector.
KT, a leading telecom company in the country, says it has developed a blockchain tech and smart contract-powered solution for automated currency exchange tellers, together with an established commercial bank, IBK.
Automated currency exchange machine operator Bellsoft is additionally being involved in the project.
Per Decenter, the group wants to roll out the machines in 2020, and will seek to install them in subway stations, shopping malls and hotels across South Korea. KT and Bellsoft say they are hopeful other banks will join the bandwagon.
According to KT, the machines will provide “preferential exchange rates,” and will offer 24-hour service.