Bank of Korea's Rhee 'not so sure' about digital currencies

SEOUL : South Korea's central bank governor Rhee Chang-yong said he became sceptical of the benefits of new technologies related to Central Bank Digital Currencies (CBDC), after recent events in the cryptocurrency market.

"If I narrowly focus on the technology of blockchain and new technologies related with crypto, stablecoin, and DeFi (decentralised finance), I am not so sure whether we are seeing the benefit of this technological development recently," Rhee said on Friday at a central banking conference in Thailand.

"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, a panelist at a session on digital currency.

TerraUSD, a so-called stablecoin that was once among the top 10 cryptocurrencies globally by market value, broke its 1:1 peg to the U.S. dollar last May, plunging in value together with its paired token Luna and sending the crypto market into a turmoil.

The market saw another rout last month, after one of the world's biggest crypto exchanges FTX filed for bankruptcy, with crypto lending company BlockFi following suit.