'Little chance for Bitcoin to evolve into real money’

Bank of Korea Gov. Kim Choong-soo on Thursday reiterated Korea’s position on Bitcoin, saying that the cyber currency had very little potential to evolve into or function like real money.

The governor’s remarks to the press came after the BOK monetary policy committee unanimously decided to keep its key base rate unchanged at 2.5 percent for seven straight months.

The Korean central bank froze its benchmark interest rate as indicators showed that the global economy led by the U.S. and Europe, the country’s two key export destinations, is recovering.

Korea’s stance against Bitcoin followed the U.S. and China.

China banned banks from trading the virtual currency due to concerns that it could be misused for money laundering and terrorism financing. The U.S. said that Bitcoin posed risks, but held “long-term promise.”

The BOK governor also said that it would continue to push for measures to safeguard the Korean economy against the yen’s depreciation, and against advanced economies, some of which are normalizing or maintaining their unorthodox monetary policies.

The BOK in October revised its 2014 growth outlook for the Korean economy down to 3.8 percent from its initial forecast of 4.0 percent

Korea’s growth forecast by the BOK for this year remained unchanged from its earlier projection in July at 2.8 percent.

The central bank’s 2014 revision followed that of the International Monetary Fund, which reported that Korea is set for a “modest recovery” backed by its fiscal and monetary stimulus.

Persistent risks concerning the U.S. economy were overshadowing the prospects for the Korean economy, leading the central bank to cut its 2014 forecast. The BOK’s 2014 outlook is 0.1 percentage point lower than the Ministry of Strategy and Finance’s forecast of 3.9 percent.

By Park Hyong-ki (hkp@heraldcorp.com)