South Korea’s reserve bank has reportedly appointed a six-member legal advisory team to look into the feasibility and potential benefits of issuing a central bank digital currency (CBDC).
The Korean central bank’s advisory group includes three university professors, two legal experts, and a senior official from the Bank of Korea.
The group will examine key financial industry trends and offer advice on matters related to legislation or amendments needed to develop and issue a virtual currency by the nation’s reserve bank.
The bank has not yet provided any specific guidelines or a deadline by which it will launch its own CBDC. The legal panel may continue to work on the project until May 2021, according to a June 14, 2020 announcement.
The regulator said it may provide the group an extension next year to work on the project, if needed.
The Bank of Korea has also introduced a pilot program that involves developing its own digital currency. The pilot reportedly began in April 2019, and will continue until December 2021, which means the advisory group might be dismissed before the pilot has been completed. It’s unclear whether the pilot team and the advisory group will be working cooperatively or coordinating any activities.
South Korea’s reserve bank has previously noted that the CBDC pilot would look into the potential limitations or challenges associated with issuing a virtual currency. The bank has previously clarified that it’s not actually committed to a plan that would definitely launch a CBDC.
Many other jurisdictions have been working on their own CBDCs, which include the digital Swedish krona and the French reserve bank’s digital currency pilot.
The digital US dollar project has also been under development for many years, however, it seems that China has taken the lead when it comes to developing a CBDC.
Security Token Advisors have compiled a list of all CBDCs and stablecoin initiatives.
The team notes:
“Whether it was the perceived threat of Libra, the growing demand for digital money, or forced digital transformation as a result of Covid-19, Central Banks all around the world have begun initiatives to explore the use and risks of using stablecoins and digital currencies pegged to the central reserve via the country’s native currency.”