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Bank of Korea Criticized, Does Not Recognize Bitcoin as Currency

A parliamentary audit of the Bank of Korea revealed that it has done “poor” research on digital currencies including bitcoin and ether. The central bank’s governor told lawmakers that digital currency is not currency and promised to conduct more research on this topic.

Also read: South Korea to Step Up Supervision of Bitcoin Trading After IMF Calls for Reform

Bank of Korea Governor: Bitcoin is Not Currency

The National Assembly of the Republic of Korea conducted a parliamentary audit of the Bank of Korea (BOK) on Monday. During the hearing, the bank’s governor Lee Joo-yeol told lawmakers that he cannot recognize digital currencies including bitcoin as currency, according to local publications.

Bank of Korea Criticized for Poor Crypto Research, Does Not Recognize Bitcoin as Currency
BOK Governor Lee Joo-yeol at the National Assembly audit on Monday. Photo/Yonhap News

“Is it possible to see virtual money as a currency?” Lee was asked. He responded, “it is difficult to look at the example of the International Settlement Banks (BIS) in terms of money,” Yonhap News reported. Regarding the need to regulate digital currency, he said:

Regulation is appropriate for it because it is regarded as a commodity. It is not a regulation at the level of money…It is not a situation for the Bank of Korea to take action at present.

In addition, Lee said that “the possibility that the central bank’s digital money will be issued in the near future is likely to become a means of payment specialized for interbank transactions or central bank transactions.”

‘Poor’ Research on Digital Currencies

Moreover, Democratic Party lawmaker and member of the National Assembly’s Planning and Finance Committee, Song Young-gil, pointed out that the audit of the central bank reveals that its research on digital currency “is poor,” Yonhap News detailed.

Bank of Korea Criticized for Poor Crypto Research, Does Not Recognize Bitcoin as CurrencySong criticized the bank for its lack of research compared to other central banks on digital currencies, such as bitcoin and ether. He noted that “there are more than 1,000 companies that can use bitcoin in Korea. However, the data provided [by BOK] shows insufficient numbers,” Asiae News quoted him.

“Virtual currency and blockchains are important research subjects, if you neglect them, you can lose the future market,” Song asserted, adding that “the bank should do more research in the future.”

Responding to the lawmaker, Lee said, “I fully agree with your point of view.” Noting that “we also refer to a lot of virtual currency research conducted in countries like Sweden,” he promised:

The Bank of Korea will put more emphasis on virtual currency research.

What do you think of the Bank of Korea’s stance on bitcoin? Let us know in the comments section below.


Images courtesy of Shutterstock and Yonhap News.


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Tags in this story
audit, Bank of Korea, BIS, Bitcoin, bok, Central Bank, crypto, Cryptocurrency, Currency, Digital Currency, ether, Ethereum, Governor, hearing, Interbank, korea, N-Featured, national assembly, parliament, payment, Research, South Korea, Transaction, Virtual Currency
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Kevin Helms

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.