Lee Chang-yong, the governor of South Korea’s central bank, is stressing the urgency and necessity of central bank digital currencies (CBDCs), indicating that action can no longer be delayed.

While the Bank of Korea has not yet made a decision on issuing a CBDC, it acknowledges the complexity of the process and the importance of careful planning.

In his address at the “2023 MOEF-BOK-FSC-IMF International Conference on Digital Money,” held at the Four Seasons Hotel in Gwanghwamun, Seoul, Chang-yong highlighted the growing issuance of stablecoins and emphasized that CBDC research is a project that cannot be postponed any longer.

He expressed concerns about the stability of the system if stablecoins become widely adopted as a digital payment method and crowd the market.

The conference, hosted by the Korean Ministry of Economy and Finance, the Bank of Korea, the Korean Financial Services Commission, and the International Monetary Fund, brought together policymakers, academics, and market participants to discuss opportunities and challenges related to digital money in the changing financial landscape.

South Korea’s Commitment to Innovation and Regulation

Kim So-young, Vice Chairman of the Financial Services Commission, also spoke at the conference a day earlier, emphasizing the importance of regulations that strike a balance between investor protection and fostering innovation.

South Korea has been actively working on regulatory frameworks to bring virtual assets under control, with legislation enacted earlier in the year. The regulations are set to take effect in July 2024, aiming to ensure investor protection in the evolving digital financial landscape.