South Korea assembles advisory group to prepare for digital won

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The central bank of South Korea has organized a central bank digital currency (CBDC) panel to speed up the launch of a digital won. 

“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,” said a spokesperson from the Bank of Korea.

The panel’s assignment is to analyze and review South Korean law and decide which laws may need to be amended to guarantee a smooth launch of a South Korean central bank-backed digital currency.

The panel’s agenda

The panel is composed of six experts from the finance and IT sectors and includes professors of commercial law and lawyers specializing in fintech. The panel’s job is to conduct their research until May 2021, which signals that it will likely be a few years before South Korea officially launches its central bank digital currencies. 

However, the formation of the CBDC legal research panel and the end-date of their assignment is a significant improvement over South Korea’s original central bank digital currency timetable, which was forced to be expedited due to competition and significant advances in the area of digital assets by governments around the world.

Expediting plans

According to the Korea Times, South Korea expedited their central bank digital currency research and development when they realized other world governments, such as the U.S., Japan, the United Kingdom, and Canada, were advancing their CBDCs at a much faster rate than they were.

“The U.S. and Japan had had no plans to issue a CBDC in the near future, but they changed their stance recently to enhance research in the emerging area,” said a Bank of Korea spokesperson.

To stay on the cutting edge of innovation and stay up to speed with these governments that represent some of the world’s top economies, South Korea had to expedite their CBDC research and development. As a result, South Korea began running a 22-month central bank digital currency pilot test in March that will end in December 2021. 

To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.