South Korea’s central bank has issued a statement in which the bank’s top leadership admitted that crypto will be used as an investment tool in near future. The Bank of Korea (BOK) recently published a report which was surprisingly crypto-friendly in nature. The bank has discussed the role of digital assets in the country’s economic future.

The report also discussed the opinion of whether the “legal currency system” could be replaced by the very popular bitcoin (BTC) and altcoins.  The report has also praised stable coin developers and decentralized finance (DeFi) advocates. The report published by the Bank of Korea on August 8 entitled “The upcoming paradigm shift in monetary sector triggered by the digital advancements.”

In the report, the bank’s official predicted that crypto assets would remain one of the most popular and profitable entities for private sector investors in years to come. In the future, digital assets would be regarded as “investment and speculative” vehicles. However, monetary institutes and institutional investors would not completely incline towards bitcoins, the primary reason behind this is the volatile nature of the crypto assets.

Authors argued that crypto will continue to increase its adoption in the private sector, however, its operations would be separate from fiat currency.  The authors noted,

“The primary concern which remains unanswered up to date is whether crypto coins such as bitcoin can replace the paper currency in future or not.”

The report further argued that the digital assets class can emerge as “digital gold,” and can be accepted as a hedge against inflation. However, the report also predicted the role of stablecoins. Since stable coins are USD-backed digital assets that are stable in nature. The report said that due to the stable nature of stablecoins, they will have the highest acceptance ratio in the crypto-assets ecosystem. The authors also stated that stablecoins pose a real threat to the traditional monetary system as stablecoins are likely to lead to cross-border remittance scenarios.

The fact is that report has no legal or practical value and is only theoretical in nature. Furthermore, it is not a legal document it is just the opinion of some of the BOK’s staff. Despite all these facts, the report is an analysis of BOK’s staff based on the current facts and trends regarding crypto-assets recent popularity and social acceptance. The report is not a policy document regarding the crypto industry. However, it is an encouragement for the sector. The report also predicted that DeFi exchanges and currencies can also gain the private sector interested as they are on the upside.  The private sector has appreciated the whole initiative and said that the report depicts the true picture of the crypto marketplace.