South Korea is the Central Bank Digital Currency Research Task Force
The Bank of Korea (BOK), the central bank of South Korea, is preparing to establish in the new year a task force dedicated to research into the digital currency of the central bank (CBDC). Let’s check to South Korea is the Central Bank Digital Currency Research Task Force.
In its brief “Monetary Policy for 2020,” released on Dec. 27, BOK said it would continue to build on its existing research on distributed ledger technology, crypto assets, and CBDCs and play an active role in monitoring and improving payment and settlement security systems.
Hiring digital currency experts
BOK is looking to hire additional experts in the field as part of its CBDC study agenda. According to a Korea Times article, the organization posted a job listing for digital currency experts on Dec. 10.
In parallel with the organization of its task force, BOK says it will actively engage in discussions with the Bank of International Settlements (BIS) and other relevant international entities to keep up with other central banks on CBDC development.
The bank says it plans to use the Financial Market Infrastructure Principles (PFMI) of BIS to enact principles of assessment to improve its oversight of domestic financial systems.
The PFMI is a BIS platform for managing market risks such as credit, liquidity, custody, settlement, operating and investment risks through payment systems, debt settlement systems, commercial repositories and other infrastructure.
BOK previously stopped pursuing the issuance of CBDC retail
A CBDC is a digital currency issued by a central bank with legal tender status and other centralized, fiat money properties.
In January 2019, after reviewing the potential legal and social feasibility of a CBDC initiative, BOK concluded that there was no need for the bank to release a CBDC that would be available shortly to the wider public.
Globally, CBDC work by central banks has generally differentiated the study of the advantages of a CBDC “retail” or “general purpose” open to the general public from “wholesale” versions of CBDCs, which would be limited to financial institutions.
The BIS has cautioned in the past that “a general-purpose [retail] CBDC could give rise to higher instability of commercial bank deposit funding” and potentially fuel faster bank runs. France aims to pilot a CBDC wholesale in 2020, as announced earlier this month by bank governor François Villeroy de Galhau.
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