A look at recruitment of the Bank of Korea’s blockchain experts
A look at recruitment of the Bank of Korea’s blockchain experts
  • Prof. Kim Hyoung-joong(khj-@korea.ac.kr)
  • 승인 2019.12.20 03:06
  • 댓글 0
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We hope that President Moon occasionally reads this kind of article to gain inspiration despite his hectic presidential schedule.
Prof. Kim Hyoung-joong, Head of Korea University's Cryptocurrency Research Center
Prof. Kim Hyoung-joong, head of Korea University's Cryptocurrency Research Center

 

Credit card companies aren't able to know what items a customer has purchased. They only know where the customer paid with the credit card. This is because there is a VAN (Value-Added Network) or PG (Payment Gateway) between the seller and the credit card company. So even if a credit card company tries to launch a big data business, it has few useful data. This is the reality in Korea.

Amazon, which is not even a credit card company, knows what customers want because there's no intermediary. If Amazon established a bank, it would be difficult for existing banks to compete with Amazon. If the government refuses a bank license for Amazon in order to protect the financial industry, it could protect the banks, but hurts consumers.

Likewise, we don't know how money is spent after it is issued by the Bank of Korea (BOK). The bank doesn't know how much money is being kept under the mattresses. It's hard to know the route through which black money is laundered. Thus, when formulating economic policies, the data is so poor that the debate is largely theoretical and insubstantial measures are implemented in the end.

A big data industry without data is like a steamed bun without angko (red bean sauce). Though Korea didn’t have any angko, Korea has sold delicious steamed buns for the past 50 years, by importing the red bean sauce. But now, China makes better steamed buns at cheaper prices than Korea. Finally, the time has come for Korea to make its own angko. If Korea finds a way to make it, it can be produced by outsourcing and yield remarkable income from intellectual property and trademark rights. That's the model of advanced nations.

The big data industry is being discussed here and there without real data. Although they argue powerfully for a digital transformation, proponents ignore that data has to be the cornerstone of big data production and they waste their money on useless things. 

The IEEE (Institute of Electrical and Electronics Engineers) is making huge sums from large libraries through papers written by scholars. Though they are the scholars’ own papers, they can’t just publish them on their homepage. This is a data industry practice of the past. Now a movement is taking hold to give back data sovereignty to individuals. Things like PSD2(The Payment Services Directive) is the result of that movement.

The BOK announced on its website would recruit a blockchain expert with Ph.D. qualifications. Wary that the government might think that it was hiring this manpower to create a CBDC (Central Bank Digital Currency) it first fenced off that area. However, only when the BOK preemptively develops and tests CBDCs will digital Wall Street be built somewhere on the ground.

A CBDC can be a cradle of big data. Although the ownership of money is not as specific as it is now, statistics can be taken on where and how the CBDC flows. That's why liquidity statistics are taken. So it's easier to set monetary policy. Coding with smart contracts could allow the automatic payment of taxes. In this way, the money takes care of itself and invests in better stocks. A CBDC may not be the answer, but it is a move in the right direction. And if it created one, Korea could be an excellent player as a financial powerhouse with its advanced technology, quickly out-competing other players.

During the analog TV era, Samsung was not a rival of Sony. The game changed as we moved on to the digital TV era. In the old days, Sony was displayed in the center of consumer electronics stores, but now Samsung and LG have taken its place.

With the advent of the blockchain era, in which double spending is statistically almost impossible, and money can be coded with smart contracts, who can say a blue ocean won’t form in Korea in the field of finance? After all, who would have expected a Korean soccer coach to become a hero in Vietnam?

Must we Koreans, who have sky-high pride, suffer the ignominy of a Ugandan-level finance system? People, who use 5G handsets more than anyone else in the world, and trade 75% of the Ripple in the world, and lead prices surging, and think they are poor while driving Mercedes. Shouldn't the BOK help the people of this unique country to build digital wall streets?

It would be good if President Moon occasionally reads this kind of miscellaneous article to gain inspiration, despite his hectic schedule. If the president invites the head of the Committee on the Fourth Industrial Revolution, which is directly under the president, to greet him and give him a pat on the back like Director Park Hang-seo, wouldn't it be a win-win situation? Sharing a vision for future finance with a newly recruited BOK blockchain expert would not be bad, either.

It is not a sin for the BOK to study CBDC. It has been a long time since the BIS (Bank for International Settlements) and IMF emphasized that need. The BOK should be a blockchain crusader in Korea through CBDC. In that sense, I look forward to the BOK, selecting a blockchain professional. I hope that Korea's financial big data industry starts with the BOK.

Editor’s Note 

The Korea IT Times reported on its column dated Dec.14 that the Bank of Korea finally recruited blockchain experts for digital research in payments, including digital currency and crypto-assets. However, as soon as the article was published, the Bank of Korea reworded the announcement on its website to remove references to the digital currency, crypto assets and other, blockchain-related words.


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