{"id":39558,"date":"2023-07-23T21:31:32","date_gmt":"2023-07-24T01:31:32","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/crypto\/hana-works-on-cbdc-stablecoin-alternatives\/"},"modified":"2023-07-23T21:31:34","modified_gmt":"2023-07-24T01:31:34","slug":"hana-works-on-cbdc-stablecoin-alternatives","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=39558","title":{"rendered":"Hana Works on CBDC, Stablecoin Alternatives"},"content":{"rendered":"
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South Korea\u2019s KEB Hana Bank is set to work with the central Bank of Korea (BOK) on the latter\u2019s CBDC pilot and stablecoin alternatives, such as tokenized deposits.<\/p>\n

Per the newspaper Maeil Kyungjae, Hana Bank is now \u201cactively participating\u201d in the BOK\u2019s ongoing CBDC Proof of Concept project.<\/p>\n

The newspaper noted that the BOK and Hana will \u201cactively participate in the preparation\u201d of a \u201ccurrency system based on blockchain technology.\u201d<\/p>\n

The parties are now conducting \u201cinternal research\u201d on \u201ctokenized deposits.\u201d<\/p>\n

Central banks have looked to popular stablecoins for inspiration in their own CBDC projects.<\/p>\n

But they believe they can go one better by improving the design of conventional stablecoins.<\/p>\n

They have labeled such coins \u201cprivate tokenized monies that circulate as bearer instruments.\u201d<\/p>\n

As De Blasis et al demonstrated earlier this year, popular stablecoins like the USD-pegged USDT experience some level of price volatility.<\/p>\n

And this volatility is something central banks appear keen to avoid at all costs with their CBDC projects.<\/p>\n

In April, the Bank for International Settlements (BIS) published a paper on tokenized deposits and their potential to displace stablecoins in the financial and banking sectors.<\/p>\n

The BIS claimed that stablecoins \u201cmay entail departures in their relative exchange values away from par in violation of the \u2018singleness of money.\u2019\u201d<\/p>\n

As an alternative, tokenized deposits, also blockchain-powered, \u201cdo not circulate as bearer instruments, but rather settle in central bank money\u201d and \u201care more conducive to singleness,\u201d the BIS wrote.<\/p>\n

The BIS also claimed that tokenized deposits may \u201cenable expanded functionality by building on the capacity of programmable ledgers to introduce contingent execution and composability of transactions.\u201d<\/p>\n

The BOK appears to have taken these recommendations to heart.<\/p>\n

And South Korean commercial banks, apparently worried that they could be frozen out of the CBDC picture, appear keen to carve out a niche for themselves in the space.<\/p>\n

Hana has been exploring the blockchain space for around half a decade.<\/p>\n

It has been making inroads into blockchain-powered real estate and investing in crypto sector-related research.<\/p>\n

The BOK, meanwhile, has been working with a number of commercial banking partners on the digital KRW project.<\/p>\n

South Korea\u2019s Banking Sector Expresses Interest in \u2018Tokenized Deposits\u2019<\/h2>\n

Maeil Kyungjae called tokenized deposits an \u201cemerging hot topic\u201d in the financial world.<\/p>\n

The BIS\u2019 April paper was co-authored by Hyun Song Shin, a former economic advisor to the South Korean presidency.<\/p>\n

The Hana rival Woori Bank\u2019s Woori Financial Management Research Institute also recently published a report on tokenized deposits.<\/p>\n

And the media outlet noted that domestic commercial banks started \u201cshowing great interest in tokenized deposits\u201d tokens when the BOK Governor Lee Chang-yong told attendees at a BIS event in March that \u201ctokenized deposits are needed\u201d in the banking industry.<\/p>\n

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Last month, Hana\u2019s Management Research Institute predicted that the domestic security token market will grow to some $27 billion next year.<\/p>\n<\/p><\/div>\n