Bitcoin Daily: S. Korea Bank Chief Says CBCDs Will Impact Crypto Demand

Bank of Korea Governor Lee Ju-yeol said he doesn’t think cryptocurrencies will be in such high demand once central bank digital currencies (CBDCs) are introduced, CoinDesk reported.

He added that bitcoin and other crypto assets have high volatility, which means that there are limits on how they’d actually function as a method of payment or store of value, the report stated.

The Bank of Korea is planning to debut its own CBDC later this year, and a number of other countries, including China, Russia, Turkey and Jamaica, have all announced possible CBDC pilots for this year, according to CoinDesk.

South Korea’s pilot, according to the report, will test fund transfers, payments, issuance, distribution and redemption.

In other news, Microsoft’s Decentralized Identity team has debuted a new framework for authenticating online identities, called the ION Decentralized Identifier (DID) network, according to CoinDesk.

The ION DID network is released on the bitcoin mainnet, the report stated. The network is a layer 2 technology like Lightning, except that the focus is on bitcoin blockchain being used to create new digital identities, rather than focusing on payments.

The network, according to CoinDesk, could be the key to allowing for an internet without people needing to deal with cumbersome passwords, emails and cellphones for verification.

ION is open to the public now and uses the same logic as bitcoin transaction layers to signify identity. A public key and its associated private key are used to verify the user’s identity.

Lastly, bitcoin is up again for the first time in three days, with traders looking forward to a stronger market after the cryptocurrency saw record $6 billion expiration of option contracts, CoinDesk reported.

David Grider, strategist at Fundstrat, told clients in an email that returns tended to be positive in the wake of events like the expiration dates, the report stated.

He said the market is calm because of the bitcoin VIX, a volatility index, and there is room for it to fall further, CoinDesk reported.