Several private banks in South Korea are reportedly examining the potential of tokenized deposit technology as an alternative to both private stablecoins and central bank-issued digital currencies (CBDCs).
according to a relationship Maeli Business News Korea, Hana Bank and Woori Bank, both Seoul-based private companies, have expressed interest in so-called “certificates of deposit” (CD) tokens. CDs are tokenized bank deposits placed on the blockchain. replace regular bills and deposits without disrupting the existing banking system. CDs also require authentication to the same standards as any traditional banking service.
Hana Bank is planning a CD token research, while Woori Bank’s research department recently published a CD token research. token report.
From the point of view of banking institutions, CDs seem to have few drawbacks. As the report points out, the interest in them stems from the concern that financial regulators have raised about the 2022 stablecoin failures. According to some anonymous senior bankers named in the report:
“CD tokens are perceived as stable from a banking perspective as they are not significantly different from the current system.”
Another important feature is the possible compatibility of CDs with CBDCs. Both banks mentioned are participating in a proof-of-concept test for a CBDC by the Bank of Korea.
In July, the Central Bank of Korea announced the progress made in the preparation of the financial statements. potential introduction of a CBDCIt includes studies on the use of smart contracts, near field communication and offline payments and cross-border payments.
A pilot program involving 14 private banks is already in operation. But, some technical issues persist; System capable of 2,000 transactions per second – higher than most national payment systems would allow – slowed down when capacity was reached. The Bank of Korea is currently exploring how to improve the technical capabilities of the project.
Translation of Walter Rizzo