Banks in South Korea are looking at stablecoins and other alternatives to CBDC

Certificates of deposit tokens have been the subject of recent studies from both Woori Bank and Hana Bank.

The Seoul-based private banks Hana Bank and Woori Bank reportedly have an interest in “certificate of deposit” tokens, as reported by Maeli Business News Korea. Tokenized bank deposits on the blockchain, like CDs, are gradually replacing traditional paper currency and in-person deposits.

While Woori Bank’s research division has just published a paper on CD tokens, Hana Bank aims to conduct its own investigation into the topic.

According to the bankers, there aren’t many downsides to CDs. The paper explains that financial authorities are interested since the collapse of stablecoins in 2022 has caused them concern. The story quotes unnamed senior bankers saying:

“From the banks’ point of view, CD tokens are seen as stable because they do not significantly differ from the current system.”

The possibility of interoperability between CDs and CBDCs is another prominent property. There are now 14 participating private banks in the trial operation. This research has prompted the Bank of Korea to investigate methods in which its technological capabilities might be enhanced.

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