On cryptocurrencies, there have been new working paper published by South Korea’s central bank.
Researchers from the Bank of Korea and Seoul’s Hongik University has been drafted, the paper seeks the paper seeks to identify factors that could drive the use of a blockchain-based currency over a government-issued one.
In the opinion of the authors, within the bounds of possibility to be a symbiotic relationship between both economies should digital currencies become more widely used. Namely, when the cost of using one currency rises, the other is likely to fall, they speculate, thereby increasing the attractiveness of the other option.
Thus, they believe costs will keep the systems in balance.
The authors tale:-
“The demand for digital currency increases on the high costs of using fiat currency. In like manner, high costs of using digital currency relative to fiat currency raise the demand for fiat currency. In a globe where lot of imperfect currencies rotating with uncertain costs associated with the use of a currency, it is unlikely that the relative costs of using digital currency will be low enough to drive out and accordingly crowd out fiat currency entirely.”
The research fits into a broader trend among central banks, which are investigating the deployment of , both by the institutions themselves as well as other groups or organizations.
If truth be told, the authors postulate that their research could give financial regulators greater insights into these dynamics as such systems become more prevalent.
“The consequences of our paper can be functional to policymakers and regulators who want to have penetration in the new monetary system where a privately issued digital currency coexists with a central bank issued fiat currency,” the authors inscribe.
For Bank of Korea, the latest work is paper, which has been among the more vocal and progressive central banks on the issue of blockchain tech.