Financial institution of Korea chief says crypto has no intrinsic worth, expects volatility

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Amid a major downward correction in the cryptocurrency market, the pinnacle of South Korea’s central financial institution is skeptical about digital currencies like Bitcoin (BTC).

Financial institution of Korea Governor Lee Ju-yeol mentioned that crypto belongings like Bitcoin don’t have any intrinsic worth, native information company Yonhap reports Tuesday. The official mentioned that he expects extra worth swings in the marketplace, stating, “It is vitally tough to foretell the worth, however its worth shall be extraordinarily risky.”

Talking on the Nationwide Meeting, Lee additionally addressed potential causes behind the latest sharp crypto rally, which led Bitcoin to become a $1 trillion asset. The BOK governor cited quite a few components together with world considerations over extreme inflation, rising institutional curiosity, in addition to a large $1.5 billion Bitcoin purchase by Elon Musk’s Tesla.

“These belongings noticed a steep rise within the shortest time frame,” Lee acknowledged. “I might say institutional traders’ evaluation of utilizing bitcoins as a hedge might be interpreted as one other issue.” 

In keeping with The Korea Instances, Lee claimed that the BOK is progressing with its central financial institution digital forex. “The financial institution is near finishing our assessment of designs and related applied sciences concerning bank-controlled digital currencies,” he mentioned. As beforehand reported, the financial institution issued a book on legal issues surrounding CBDCs in early February.

Bitcoin noticed a steep correction on Feb. 22, with its worth plunging from above $58,000 to below $48,000. United States Treasury Secretary Janet Yellen criticized Bitcoin in an interview on Monday, stating that the world’s largest cryptocurrency is “extraordinarily inefficient approach of conducting transactions.”