Governor of the Bank of Korea Rhee Chang-yong stated on Friday that central banks face difficulties due to the rise of stablecoins like tether (USDT) and USD Coin (USDC), since despite their name, they frequently lack stability. This was reported by Yonhap News.
“This underscores the urgency for central banks to consider introducing central bank digital currencies (CBDC), whether retail or wholesale,” Rhee said at the Digital Money: Navigating a Changing Financial Landscape conference. “Their widespread adoption could diminish the role of central bank money and impair the effectiveness of monetary policies.”
This week, attention has been drawn to stablecoins’ capacity to maintain their pegs—cryptocurrencies whose value is correlated with a fiat currency like the dollar or euro.Tether, the biggest stablecoin by market value, was ranked just one spot above the bottom on the five-point scale by ratings firm S&P, which unveiled a mechanism for assessing just that feature on Wednesday.Out of the eight coins analyzed, none deserved the highest scores.
Rhee further stated that the Bank of Korea is investigating the tokenization of real-world assets and developing a wholesale CBDC pilot, according to Yonhap.As previously announced, the bank intends to launch a retail trial program with 100,000 participants in 2019.