The Bank of Korea joins the blockchain research army and calls for cooperation between the government and the industry

According to a new research report released on the official website of the Bank of Korea (BOK), the Bank of Korea is closely following the development of blockchain technology and is even researching blockchain technology on its own.

The report, written by the Bank of Korea’s Payment System Research Group, introduces digital currencies and distributed ledger technology and makes predictions about how the technology will develop in the future.

The report believes that digital currency is unlikely to become a mainstream application due to excessive price fluctuations, complex technical operations, and the risk of being hacked and end users losing their private keys.

“Digital currencies are unlikely to develop to the stage where they will replace fiat currencies or other major payment instruments.”

When it comes to distributed ledger technology, the report's attitude is relatively positive. It seems that the Bank of Korea is more optimistic about the development prospects of blockchain than digital currency.

Call for cooperation

The report adopts the popular view that blockchain technology has the potential to disrupt financial market infrastructure and intermediaries, as well as central banks.

"We should pay special attention to its technological innovation. In the future, financial services will be carried out in a more efficient and secure way without having to rely on a unified central agency responsible for processing information."

However, the report believes that currently, blockchain technology itself has some shortcomings, which prevents it from being widely adopted by financial institutions.

To remove barriers to adoption, the report recommends that “collaboration among financial institutions, start-ups and government agencies is key”.

Looking ahead to the future development of blockchain, the report recommends that the central bank pay close attention to the development of distributed ledger technology in domestic and global financial institutions and startups. In addition, "in-depth research should be conducted, focusing on the application of distributed ledger technology."

Finally, the report points out that governments and regulators must also play their due role, while addressing the risks brought by technology, they must also establish a "comprehensive and flexible regulatory system" to avoid hindering innovation.

Original article: http://www.coindesk.com/report-south-korea-central-bank/
By Daniel Palmer
Translator: printemps
Editor: printemps
Source (translation): Babbitt Information (http://www.8btc.com/south-korea-central-bank)