Bank of Korea to take a closer look at crypto

  • Korean central bank has decided to create a research panel that would look into the legal issues of CBDC.
  • The bank made the move despite the fact that there is no demand for native crypto in the country.
  • The panel started its work today, and it is scheduled to continue researching until May 2021.

South Korean central bank, the Bank of Korea (BOK) is getting ready to delve deeper into the cryptocurrency space. The country already launched a nearly two-year-long program earlier this year. While everything currently points to a lack of demand, the BOK decided to create a legal advisory group for crypto.

The group’s goal will be to review the legal issues before the bank launches its own CBDC (Central Bank Digital Currency).

Korean central bank’s new effort to investigate CBDC

A recent report published earlier today claims that the country’s central bank already created the group, which currently has six members. Those include legal practitioners and law professors who will provide consultations about cryptocurrency issuing and governing.

The panel officially started operating today, and it will keep going until the end of May 2021. The bank’s official stated that “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.

Apart from this, the report also included the outline of the comments made by the bank’s Governor, Lee Ju-yeol. He stated that it is necessary for the bank to improve its research and development for CBDC. He sees digital innovation as a crucial task for both, banks and private lenders. As such, they should be embraced, especially now, when contactless payment methods seem to be on the rise.

No demand for CBDCs in Korea

While the move certainly indicates that the country is ready to create and start using its CBDC, that is not yet a certainty. In fact, the country appears to be dismissive of the idea of a native crypto. The legal panel, while a major move in the crypto world, will be more of a test program.

The reason for this is that there is simply no demand for a CBDC. However, the bank wishes to be prepared to move swiftly if the situation changes, and demand does appear.

Meanwhile, other countries, including even the EU, have already enhanced their own CBDC research a while ago, and South Korea is actually falling behind. So far, the most advanced nation is undoubtedly China, which is already conducting real-life tests for its digital yuan.

The country is even nearing the final stages of testing, and it might be ready for an official CBDC launch sooner than expected.