The Central Bank of South Korea issued a digital currency alert (CBDC) a week after it declared that it would not introduce a ban, – this was reported in the local Yonhap News Agency, February 7th.
CBDCs, which are also known as digital or government currencies based on the blockchainBlockchain
is a continuous and sequential block chain of information (digital linked list). When building a blockchain, copies of related blocks are simultaneously stored on multiple computers.Details, are a block version of a country's national currency, replacing or circulating with paper notes and coins.
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Ban on the use of digital currency
Several governments are currently exploring the use of CBDC, the benefits and great development prospects, while the Central Bank of South Korea opposes digital currencies.
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The decision was made as a result of a six-month consultation process with the Bank of Korea (BoK). Now the central bank said in its report that the CBDC will lead to a massive withdrawal of funds from private institutions, a decrease in liquidityLiquidity
– is a term that means the ability to sell any financial assets (below or above the market price). The term “liquidity” in Latin means “liquid”, “flowing”.Details and an increase in interest rates.
"CBDC is a kind of account issued by BoK. People trust him more than commercial banks", explained Kwon Oh-ik Yonhap, one of the authors of the report, adding: "Deposits are one of the largest sources of bank loans. When people take their money, banks raise rates to get more money."
The government of Seoul has decided not to make significant changes in its position on cryptocurrency in general in recent weeks. Last month, lawmakers also ruled out the possibility of canceling the original coin proposals in the country.
Editor: Yuliya Soroka