Bank of Korea Governor Rhee Chang-yong has stated that South Korea will not issue its CBDC ahead of the U.S. and Europe.
The governor has admitted there are minimum benefits of becoming the leader in issuing central bank digital currencies.
South Korea has announced that it will be delaying the issuance of its Central Bank Digital Currency (CBDC). Bank of Korea Governor Rhee Chang-yong explained the bank’s intention, explaining that it had no desire to launch a CBDC ahead of the U.S. and Europe. However, the bank will be inviting 100,000 citizens to test the new technology in 2024. Still in testing, these users will be limited to using the CBDC only for payment, without an option to store, exchange, or send it to other users.
A majority of developed countries are looking to launch a CBDC. European countries and the U.S. are in different stages in the development of their digital currencies. While many would presume that South Korea would look to get ahead of the curve and launch its CBDC to propel its economic development, the country has sought to wait for its allies. The governor explained that South Korea has no desire to launch its CBDC ahead of these countries.
Interestingly, the governor has further admitted that South Korea being a leader in the issuance of a CBDC has minimal benefits. Like most countries, South Korea determined to develop a CBDC after COVID-19 which highlighted the need and benefits of a cashless society. The digital form of money ensures liquidity among banks, faster means of payment, and safer and environmentally friendly transactions.
As countries forge ahead in developments, analyst have increasingly raised concerns about their issuance. Censorship and privacy are one of the biggest concerns for observers. With CBDC issued by governments through central banks, the authority will be able to track and possibly control what users can buy or what transactions they can execute.
Monero, Dash, and ZCash Superior to CBDCs
While CBDCs have their shortfalls, privacy coins led by Monero (XMR), Dash, and ZCash offer benefits limited by national digital currencies. Privacy coins offer absolute privacy and anonymity. The blockchain obscures the flow of money across their networks, ensuring no one can see the sender, or receiver and in some networks, even the amount transacted remains anonymous.
By doing so, these coins offer their users ultimate financial privacy. Neither the government nor intrusive companies trying to profile people can be able to track or acquire data based on financial activity. Unfortunately, governments have used this as an excuse to allege that privacy coins are used to fund terrorism and other illegal activities. However, data has increasingly shown that these illegal activities account for a very small sum of the total transactions completed on the networks.
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