Korea should develop a digital won – KIF senior researcher

Korea should develop a digital won – KIF senior researcher

The crypto revolution is not just limited to bitcoins and altcoins anymore. Blockchain, which is the supporting technology for cryptocurrencies, can also be used to create state-controlled digital currencies as well.

Now, the very idea of centralizing decentralized digital currencies may seem to go against the grain of the original vision of cryptos, but it will foster a more mainstream integration of both blockchain and digitized tokens.

Lee Dae-ki, a senior researcher at the Korea Institute of Finance (KIF), seems to agree with this sentiment, going as far as advising the Bank of Korea (BOK) to “seriously consider” creating a digitized version of the country’s fiat currency, the won.

According to Dae-ki, the benefits of Blockchain Technology, which would support the digital won, include lower fees, a high level of transparency and easy customer usability. He added that adopting digital currencies could be a “revolution in finance”.

According to the Korea Times, Dae-ki stated:

“Technology based on blockchain, the distributed accounting database, will show great promise in enabling central banks to improve their defenses against cyber-attacks, and overall, the way payments are conducted between institutions and consumers.”

However, the country is a long way to realizing this as cryptocurrencies are still not seen as legal tender in Korea. Nevertheless, the implementation of a digitized fiat currency would completely transform the country’s banking system. He added:

“This will overhaul the banking industry as banks will have to compete with digital currency systems by providing higher interest or additional services which will be beneficial to consumers.”

Even though crypto is not a legalized medium of exchange in Korea, the country still has one of the largest trading markets in the world. They are currently in the process of implementing stricter regulations to facilitate a solid framework with regard to trading in crypto.

However, there is global debate as to what digital currencies actually are. Just because it is called a currency, it doesn’t mean that’s what it is, at least for some countries. Dae-ki explained:

“Regular currency, or commodity regulating cryptocurrencies such as Bitcoin are, in part, held back by the government’s growing inability to officially name what it actually is. Some countries regard digital coins as commodity, while other places are treating them as regular money.”

China also seems to be showing interest in digitizing their local fiat currency, with the People’s Bank of China having successfully tested this blockchain-based theory last year. In addition, Russia, Israel and Dubai have vocalized their goal to do the same by creating and issuing state-run digital currencies.

Author : Jack Dean

Jack has worked in the cryptocurrency industry for 5 years now as a reporter. His experience is predominately in banking, while he also has a keen interest in the forex world. His daily output is read by thousands of readers globally.