The central bank of South Korea advances digital currency research and establishes a team of legal experts who can advise on possible regulatory issues.
BOK accelerates on CBDC
According to an article in the Korea Times on Monday, the Bank of Korea (BOK) said that a group of six people composed of legal experts in the financial and IT sectors, as well as one specialized in fintech, would provide assistance and advice to the bank while the latter develops and tests a Central Bank Digital Currency (CBDC).
"We have set up an advisory group to discuss the legal issues surrounding a CBDC and understand what laws need to be reviewed or enacted to facilitate progress in the possible issue of digital currency by the BOK," a BOK official told the Korea Times.
It therefore appears that BOK has quickly re-evaluated the CBDC. In fact, in December, the bank set up its task force to analyze digital currencies, concluding that it was appropriate to "keep an eye" on what other countries were doing rather than move to create something.
The situation changed in April, when other countries, including Japan and the United States, started moving faster than initially expected. By abandoning the observational approach, BOK embarked on a 22-month pilot program to develop and test a new CBDC that could work on a physical money replacement project.
What can be learned from South Korean research
Although BOK is currently playing hole cards, some tips can still be drawn from its work. It appears that the CBDC, as it was proposed at this stage, takes advantage of the settlement systems that BOK and the other central banks use to allow high value transfers between financial institutions.
Last week, Bank of Korea Governor Lee Ju-yeol described the fact that central banks are developing digital payment systems in addition to their Real-Time Gross Settlement (RTGS) systems as "noteworthy" - networks of interbank payment - "to reduce risk".
"The digital transformation could go beyond the private sector to the central bank's payment and settlement system," Lee said in a speech on the occasion of BOK's 70th anniversary.
"As an institution responsible for ensuring the security and efficiency of the payment and settlement system, the central bank must proactively respond to these changes."
"Research and development currently underway on central bank digital currency must be done as planned," he added. The recently convened BOK legal team is believed to have met for the first time on Monday and will continue to do so at least until May 2021.
Unfortunately as the others advance, Italy instead seems to be lagging behind. In the meantime though, you can start trading cryptocurrencies with software like Bitcoin system. How do you exchange your cryptocurrencies? Let us know in the comments below!
