This is part of a series of initiatives being launched by the central bank to speed up research and development in relation to the country’s CBDC
The Bank of Korea has announced the creation of a six-member legal advisory group to advise, evaluate and review potential legal issues surrounding South Korea’s Central Bank Digital Currency (CBDC). The announcement comes after the country launched a new pilot program focused on CBDCs in April.
The past few months have seen a considerable shift from Korea’s “wait-and-watch” policy on CBDCs as many countries like China, Japan, and the US have ramped up their research efforts and forced Korea to take a more direct approach.
According to a press release by the bank today, the panel consists of three professors, two lawyers and one Bank of Korea official. They are expected to provide legal consultations regarding issues that could arise if the country goes ahead and launches a CBDC. Though Korea has been considering issuing a state-backed digital currency for the past few years, officials have been quick to clarify that steps to increase research is not an indication of a changed stance from Korea on a CBDC.
The legal advisory group is expected to operate until at least May 2021, by which time South Korea hopes to have a roadmap for any CBDC plans. According to a local report, the initiative is part of the Bank of Korea’s 22-month-long pilot program launched in April. Reports suggest that the Bank of Korea hopes to enhance its research in order to finish a pilot test on issuing digital currencies by the end of next year.
Outlining the need for a competent legal board in such an initiative, an official for 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.”
During the celebration of the Bank’s 70th anniversary recently, Bank of Korea Governor, Lee yu-Jeol underlined the importance of increased research and development for state-backed digital currencies, saying, “digital innovation is a crucial task. Private lenders, as well as central banks, should embrace amid the rise of contactless payments.”
South Korea might already be falling behind other countries like China and Japan in the race to launch a CBDC. Ledger’s Glen Woo predicted today that China might be the first country to launch its own CBDC. With central banks from developing countries across the world considering the CBDC, South Korea could soon be speeding up its own digital currency initiatives.