South Korea’s KEB Hana Bank appears to be taking significant strides in the blockchain world, actively entwining itself with the Central Bank of Korea (BOK) in the development of blockchain-based currency systems. A recent report highlighted the bank’s involvement in the BOK’s ongoing CBDC Proof of Concept project and a shared interest in the exploration of tokenized deposits, a concept alongside stablecoins that has generated a considerable buzz in the financial sector.
The banking institute has resonated with the perception that the design of conventional stablecoins could be refined, despite the popular emulation by a myriad of central banks. Both parties have set their sights on creating a stable coin system, distancing themselves from the notion of “private tokenized monies that circulate as bearer instruments” that might experience price volatility.
The Bank for International Settlements (BIS) dedicated an intriguing paper to this matter in April, stating that stablecoins might become unstable, invoking breaches in their exchange values on-par. Instead, they championed the concept of tokenized deposits as more conducive to ‘singleness’, which also allowed for enhanced functionality through the malleability of programmable ledgers.
These suggestions by the BIS appear to have found favourable ground with the BOK, causing commercial banks, including Hana, to maximise their roles within the emerging field of blockchain-based transactions. Hana’s pursuit of blockchain technology – observed in areas beyond banking, such as real estate – has shown robust investment in research associated with the crypto sector.
Parallel to this, the BOK disclosed that commercial banking partners have shown an interest in the digital KRW project, highlighting the ever-evolving dynamics of banking and cryptocurrencies.
Tokenized deposits, whose popularity has recently soared in finance circles, can fulfil a significant need in the banking industry, as stated by BOK Governor Lee Chang-yong. A rival to Hana, Woori Bank‘s Woori Financial Management Research Institute published a report on tokenized deposits expressing similar sentiments.
Hana’s Management Research Institute’s latest predictions revolve around the potential growth of the domestic security token market, anticipated to touch $27 billion next year. This gets us thinking on the element of scepticism in how the market might respond, considering the ever-changing landscape of blockchain and cryptocurrency.
Source: Cryptonews
