Education
Legal Panel on Advisory Potential digital currency launch of the Central Bank of South Korea
The Bank of Korea (BOK) announced that the six-party group, which consists of legal experts on the financial and IT sectors, and a specialist in the field of technology will provide guidance and advice to the bank. South Korea's central bank continues digital currency work by forming a legal group to advise on potential regulatory sticking points.
We have set up a consultative group to debate legal issues relating to CBDCs and to determine what laws should be revised or enacted to ensure smooth progress on the possible digital currency release by the BOK, a BOK official said to the Korea Times.
It is the next stage of CBDCs' quick re-evaluation by the BOK. When he established the Digital Monetary Task Force in December, he said that he had more to "keep an eye" than to create something himself on what other countries had done.
However, that changed in April when the move began faster than expected from other countries like Japan and the United States. With a 22-month pilot plan to create and test a new CBDC to replace physical currency, the BOK has abandoned its wait-and-see strategy.
Although the BOK holds its cards in the mouth, it has dropped a couple of hints.
It appears that the proposed CBDC will retrieve settlement structures from which it and other central banks are using to facilitate high value transactions between financial institutions.
Governor Lee Ju-yeol of the Bank of Korea last Friday described it as 'notable' that central banks were developing 'settlement risk-cutting' digital payments systems in addition to their real-time gross settlement system (RTGS).
In an address to commemorate BOK's 70th anniversary, Lee claimed that "digital transformation could extend beyond the private sector to the central bank payment system.
"The Central Bank must be proactive in responding to these changes as an institution which ensures the safety and efficiency of payments and settlement systems."
"Digital money must be carried out as planned in the ongoing research and development on central bank," he added.
The newly appointed BOK law group is expected to meet on Mondays for the first time and at least until May 2021.
