South Korea launches a CBDC research committee

South Korea’s central bank, the Bank of Korea (BOK), has launched a committee to manage the digital currency research and create a regulatory framework. The country’s efforts to roll out a native digital currency are rapidly speeding up as China’s digital yuan is being thoroughly tested across the country. Last month, Korea acknowledged that it was “concerned” by Chinese influence in the blockchain space. 

South Korea’s newly formed panel aims to explore the risks involved in issuing a central bank digital currency (CBDC). In addition to this, the committee plans to create regulations to allow fiat and digital currency systems to run parallelly.

The committee comprises experts from finance and IT sectors, including professors of commercial law and a fintech lawyer. A BOK legal policy official is also a part of the team, signifying that the country is currently focussing only on legal clearances rather than the technical aspects of a CBDC. 

BOK noted the panel will sit until May 2021. The bank added:

We established the advisory group to discuss legal issues surrounding a CBDC and [assess] which laws need to be revised or enacted for smooth progress in the BOK’s possible issuance of digital currency.

A few months back, BOK Governor Lee Ju-yeol had said that the research and development in CBDCs should be sped up. According to him, digital innovation is an important task and both private lenders and central banks should “embrace amid the rise of contactless [digital] payments.”