The Central Bank of South Korea appears to become more serious with its research into digital currency. As reported by the Korean Times on 15 June, the Bank of Korea (BOK) has set up a panel to advise on the possible regulatory obstacles in issuing a central bank digital currency (CBDC). The move by the bank does seem to be a step forward towards issuing a CBDC. The Central Bank said
“We established the advisory group to discuss legal issues surrounding a CBDC and figure out which laws need to be revised or enacted for smooth progress in the BOK’s possible issuance of digital currency,” a BoK official stated while speaking to Korea Times.
As per the report, the legal advisory panel consists of six law practitioners and law professors who will keep tabs on the legal framework of the central bank digital currency, if necessary. That being said, the country is not getting ready to issue digital currency any time soon.
The panel is another step in a rapid revaluation of the digital currency at Bank of Korea (BoK) in a 22-month period. Notably, in December the central bank set up a task force to study digital currencies. Instead of developing one, the task force was set up to keep an eye on what other countries are doing in terms of state-issued digital currencies.
South Korea ‘s Central Bank has recently stated that it may not be able to launch a digital currency any time soon, as the demand for fiat remains high. Irrespective of the sentiment, BoK launched a pilot test for the digital Won. The trial began in April and will take place until December next year to analyze the usability and regulatory provisions of the state-issued cryptocurrencies.
Bottom Line
The establishment of a legal advisory panel seems to be part of the overall pilot testing plan as it will only be in effect until 2021 for one year.
Notably, Governor Lee Ju-yeol of the central bank stressed the need to intensify research and innovation in state-issued digital currencies during the celebrations of BoK’s 70th anniversary. In addition, at times like these, when we need contactless payment systems more than ever, he urged the central bank and private sector to embrace digital innovations.