The governor of Korea’s central bank believes the rise in CBDC will reduce the demand for Bitcoin (BTC) and other cryptocurrencies.
CBDC to Hinder Bitcoin Demand
In a rather interesting statement, Lee Ju-young, the governor of the Bank of Korea, pointed out that the demand for Bitcoin and other similar cryptocurrencies will decline once the CBDCs of the sovereign states are introduced in large numbers.
According to a report from the Korea website, Lee’s comments were made at an event last week. The governor said:“When the central bank-issued digital currency is introduced, the demand for bitcoin and other cryptocurrencies as means of payment will decrease.”
Lee added that Bitcoin and similar cryptocurrencies have high price volatility, which hinders their potential use cases as reliable payment methods or value stores.
Interestingly, when Lee’s comments were released, South Korea had fallen deep into the CBDC rabbit hole and actively tested and tried to promote the official spread of digital television.
According to the latest report, Shinhan Bank of Korea announced completing the CBDC pilot project in partnership with LG CNS. After successfully implementing the pilot project, the responsible team stated that the bank was ready to launch the official Korean digital won.
Li added during the event: “Before issuing a CBDC, it is necessary to review the technical requirements and carefully examine the impact of the CBDC on the financial system.”
CBDC Experiencing Increase in Growth
South Korea isn’t the only country that has extensively tested its CBDC. Other major economies worldwide are burning the midnight oil to build their own CBDC while making sure they are in no rush.
Compared to other countries, China is way ahead in the CBDC competition. BTCManager reported in February 2020 how China’s city of Xiong’an introduced the first digital RMB hardware wallet. Similarly, Bank of Japan Governor Haruhiko Kuroda said Japan’s plan to introduce CBDC is still ongoing and experiments in this area may begin in the spring.