The governor of the Korean central bank has his doubts in light of the recent crypto contagion, while the executive of the Hong Kong central bank appeared to be optimistic about the future of decentralized technology.
Governors of central banks from all over the world are currently in Thailand to discuss the significance of central banks in light of the development of financial technology. The Bank of Thailand (BOT) and the Bank for International Settlements (BIS) are hosting the conference together.
Eddie Yue, chief executive of the Hong Kong Monetary Authority, Changyong Rhee, governor of the Bank of Korea, Adrian Orr, governor of the Reserve Bank of New Zealand, and Cecilia Skingsley, from the Bank for International Settlements, participated in a panel discussion on digitalized monetary systems. They talked about the rise of digital assets and central bank digital currencies (CBDC) as well as the risks that come with the new technology.
The chief of the Hong Kong Monetary Authority talked about the innovations and advantages of blockchain technology, as well as how it might affect central banks. According to Yue, stablecoins and CBDCs may provide a more cost-effective and efficient method of transaction in the long run. He did, however, point out that any new technology carries some risks, whether innovation or operational risks.
Yue pointed out that the nature of blockchain technology is decentralized. In this manner, it is undeniably more muddled to relieve on-chain gambles. Regulators ought to concentrate on off-chain activities as a result. He elaborated:
Regulating off-chain activities like virtual asset exchanges can serve as a foundation.
Hong Kong will soon implement investor protection in addition to AML (anti-money laundering).
Additionally, he disclosed that distinct regulations aligning with international consensus on regulating the stablecoin industry are being developed by the Hong Kong government.
In light of the recent crypto epidemics, the governor of the Bank of Korea, Changyong Rhee, was less than enthusiastic about the prospects for blockchain technology in the financial sector. He said that he wasn’t sure if “we are seeing the benefit of this technological development recently” and “I was more positive before, but after seeing the Luna, Terra, and now the FTX issues,” but he was not sure.
Rhee stated, “I don’t know if we will see the true benefit of this new technology, at least in terms of monetary policy.”