Hong Kong central bank executive looked optimistic about the future of decentralized tech, while the Korean central bank governor has his doubts in the wake of the recent crypto contagion.
Central bank governors from round the globe are presently in thailand to discuss the role of central banks amid evolving monetary technology. The conference is put together hosted by the Bank of thailand (BOT) and therefore the Bank for International Settlements (BIS).
A panel discussion on digitalized financial systems saw 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 recent zealand and Cecilia Skingsley from Bank for International Settlements discuss the increase of digital assets and central bank digital currencies (CBDC) and therefore the risks related to the new technology.
The hong kong financial Authority chief discussed the innovations and benefits of blockchain technology and its probable impact on central banks. Yue said that within the long term CBDCs and stablecoins can give a additional efficient and cost-effective approach of transactions. However, he noted that with any new technology there are certain risks related to it be it innovation or operational risks.
Yue noted that blockchain is a decentralized technology naturally. Thus, it's way more complicated to mitigate on-chain risks. this is often the rationale regulators should focus on off-chain activities. He explained:
“We will begin with regulating off-chain activities like regulating virtual asset exchanges. hong kong can presently introduce not just AML (anti-money laundering) aspect however also capitalist protection.”
He conjointly revealed that the hong kong government is working on separate regulations orienting with international consensus on control the stablecoin industry.
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Changyong Rhee, governor of the Bank of korea, wasn't therefore optimistic regarding the future of blockchain technology, particularly within the monetary sector, in light of the recent crypto contagions. He said that he wasn't therefore sure whether “we are seeing the benefit of this technological development recently,”
“I was more positive before, however after seeing the luna, Terra, and now the FTX problems. i do not know [if] we will see the real benefit of this new technology, a minimum of for monetary policy,” said Rhee.
(PRASHANT JHA, Cointelegraph, 2022)