A Central Bank Digital Currency (CBDC) is not good for a country’s financial stability, said the Bank of Korea in its latest report. Dubbed as ‘Central Bank Digital Currency and Financial Stability,’ the study found that the introduction of CBDC deposits would radically decrease the supply of private credit by commercial banks. As a result, those banks will likely increase their interest rates which will further lead to a decline in their reserve-deposit ratio. CBDC Promotes “Bank Panic” Authors Young Sik Kim and Ohik Kwon reached the said conclusion after considering that central banks will work as account holders. In
The post A Central Bank Digital Currency May Lead to All Kinds of Monetary Chaos, says Korea’s Central Bank appeared first on CCN
* First published on ccn.com
