Hong Kong central bank executive is optimistic about the future of decentralized tech, while the Korean central bank governor has his doubts.
Global governors of central banks are currently meeting in Thailand to examine the function of central banks in the context of developing financial technology. The Bank of Thailand (BOT) and the Bank for International Settlements (BIS) are co-hosting the conference.
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 where they discussed the rise of digital assets and central bank digital currencies (CBDC) as well as the dangers posed by the new technology.
The head of the Hong Kong Monetary Authority spoke on blockchain technology’s breakthroughs, advantages, and potential effects on central banks. According to Yue, stablecoins and CBDCs may eventually provide a more effective and affordable means of conducting transactions.
He did point out that any new technology comes with some risks, whether they are related to innovation or operational concerns. Blockchain is a decentralized technology, according to Yue.
Therefore, it is far more difficult to reduce on-chain hazards. Regulators should concentrate on off-chain activities for this reason. He explained:
“We can start with regulating off-chain activities like regulating virtual asset exchanges. Hong Kong will soon introduce not just AML (anti-money laundering) aspect but also investor protection”
He also said that the Hong Kong government is developing unique legislation that are in line with the global consensus on how to regulate the stablecoin sector.
In light of recent crypto contagions, Bank of Korea governor Changyong Rhee was not overly hopeful about the future of blockchain technology, particularly in the financial sector. We may not be “getting the benefit of this technological breakthrough recently,” he claimed.
“I was more positive before, but after seeing the Luna, Terra, and now the FTX issues. I don’t know [if] we will see the real benefit of this new technology, at least for monetary policy,” said Rhee.
