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South Korean Central Bank Forms CBDC Legal Advisory Group

South Korea Passes New Cryptocurrency Law

Central bank digital currencies (CBDCs) have continued to dominate discussions across the cryptocurrency space. Now, it would appear that South Korea is pushing forward with a possible national cryptocurrency as well.  Earlier today, The Korea Times reported that the Bank of Korea (BOK) has inaugurated a panel that will lead research into digital assets and advice on its mission to develop a CBDC.

A Long Road Leads Here

As the report explained, the panel will consist of six individuals, all of whom will be legal experts from the information technology and financial sectors. The bank will also be looking to add one legal professional in the FinTech space. The goal, per the news source, will be to advise the bank through the testing and development phases of the possible national cryptocurrency.

“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,” a BOK official said to the news source. 

This development seems to indicate that South Korea’s government is finally ready to adopt the next phase of financial development. The government initially set up a task force last December, although that was more in a bid to “keep an eye” on other countries’ actions with the technology.

However, given how quickly other countries have moved into the technology, South Korea appears keen on not being left behind. Early in April, the Bank of Korea announced that it had launched a digital currency pilot program that will help it to assess the logistics of a possible asset. 

As the bank explained in its release, it launched the pilot program in March. The program will run for 22 months, and it consists of a legal and technological review of a possible CBDC issuance. The initial phase of the program will include devising the requirements and design of the asset. This phase will run until July, while a review of the technology required for the asset will also run from April to August.

Capping off the year, the Bank plans to analyze the business processes of the asset. For the entirety of 2021, the Bank will build and test the CBDC based on the results of the pilot program and recommendations from experts.

More Governments Believing in CBDCs

South Korea’s decision to explore a national digital asset is coming on the heels of significant progress from various countries. China is already working its national cryptocurrency, as it announced tests on four regions months back.

At the same time, Banque de France, the French Central Bank, announced last month that it had successfully tested the first iteration of a possible Digital Euro.  It’s worth noting that France’s Digital Euro iteration hasn’t gotten approval to operate across the Eurozone. For one, the asset was only tested for wholesale applications and the needs of financial institutions. Still, progress on such fronts is an attractive prospect for other countries.

All of these continue to underscore the fact that CBDCs have become more prominent across the past few months. National cryptocurrencies were no more than a possibility this time last year. Now, we have several top economies announcing pilot programs into the technology.

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