While the head of the Hong Kong central bank appeared positive about the future of decentralized technology, the governor of the Korean central bank expressed skepticism in the aftermath of the recent crypto outbreak.
Global governors of central banks are meeting in Thailand to explore their institutions’ changing roles in the face of rapid advances in financial technology. The Bank of Thailand (BOT) and the Bank for International Settlements (BIS) are co-hosting this conference (BIS).
Eddie Yue, CEO 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, Bank for International Settlements, discussed the rise of digital assets and central bank digital currencies (CBDC) and the risks associated with the new technology on a panel discussion on digitalized monetary systems.
The head of the Hong Kong Monetary Authority discussed the potential impact of blockchain technology on central banks, along with its innovations and benefits. According to Yue, CBDCs and stablecoins can provide a faster and cheaper method of transactions in the long run. But he cautioned that there are always dangers when using new technologies, whether those dangers are creative or practical.
Yue pointed out that because blockchain is a decentralized system, it is far more difficult to prevent on-chain attacks. Because of this, it’s crucial for authorities to keep an eye on events that don’t take place on the blockchain. We can begin with off-chain operations, such as virtual asset exchanges, he said. Hong Kong is planning to implement new measures for investor safety in addition to AML (anti-money laundering).
Furthermore, he said that the Hong Kong government is preparing its own regulations for the stablecoin industry that are consistent with worldwide consensus.
In light of the recent crypto epidemics, Changyong Rhee, governor of the Bank of Korea, was not overly hopeful about the prospects for blockchain technology, particularly in the financial sector. I was more optimistic previously, but after witnessing the Luna, Terra, and now the FTX difficulties, I’m not so sure we’re seeing the advantage of this technological development recently,” he remarked. Rhee questioned whether or not the new technology would prove useful for monetary policy.