13th June 2024

Better business. Better community

Business Industry and Financial

IMF chief calls for regulatory efforts to control crypto assets

“The answer is on the technology side,” David Rutter, CEO and founder of US blockchain tech company R3, said. “The technology is just in the neighbourhood to building a more efficient global monetary system.”

The discussion was followed by another which looked into the possible use cases of digital money. Sungkyunkwan University Associate Professor Lee Seung-duck; Kelvin Li, head of Ant Group’s global fund platform, and more participated as panellists.

“The CBDC money can be utilized as a payment means where predefined economic activity can be traced and verified,” said Li from Ant Group, a fintech company under the Chinese retail giant Alibaba.

“The CBDC enables direct and fast transactions between participating countries. It is a program of money which can improve the transmission efficiency,” Li said, stressing digital money can streamline the complicated process of traditional cross-border transactions.

While there are concerns that digital money transactions could lead to privacy breaches, Professor Lee explained the introduction of the CBDC could enhance privacy as data can be protected when needed.

“This could be beneficial for both developing and advanced countries from the perspective of privacy protection, as digital money enables transactions without tracking or collecting data. This can build trust in the digital monetary system,” Lee said.

The last panel discussion of the day delved into the roles of standard-setting bodies in the crypto ecosystem, inviting Steven Maijoor, the executive board of De Nederlandsche Bank, the Dutch central bank; Jun Yo-stop, an official from the Financial Services Commission; Neil Esho, secretary general from the BIS, and more as panellists.

Jun mentioned the “kimchi premium” which describes the boosted prices of cryptocurrencies in South Korea’s exchanges compared to their international peers, backed by Koreans’ fervent interest in crypto.

“Kimchi premium grew as the local authorities did not have any regulations for the crypto market at the time,” Jun said. “But after the authorities implemented regulations through administrative guidances, the price gap has narrowed, also partly from the overall crypto market cooling down.”

“With the introduction of the Virtual Asset User Protection Act from next year, we expect the kimchi premium to further diminish,” he said.

The event will continue throughout Friday, covering the coexistence of privately issued stablecoins and the CBDCs, the cross-border use of the CBDCs, and the role of central banks in the digital economy.

Im Eun-byel

The Korea Herald

Asia News Network