Anna Jiwon Park has been covering the politics at The Korea Times since the summer of 2024, when she joined the press pool for the Office of the President in Korea. Prior to that, she spent about five years reporting extensively on financial markets, regulatory authorities and the financial industry. She joined The Korea Times in 2019 after spending eight years as a broadcast journalist at Arirang TV, Korea’s leading global broadcaster, covering politics, defense and culture.
Bank of Korea condemns e-commerce transaction revision as 'Big Brother law'
The headquarters of Bank of Korea in central Seoul / Korea Times file
By Anna J. Park
BOK-FSC conflict intensifies over control of settlement payment system
By Anna J. Park
A conflict appears to be intensifying between the central bank and financial watchdog over control of the country's settlement payment system after the Bank of Korea (BOK) denounced a proposed revision to the nation's “Electronic Transactions Act” as being the only “Big Brother law” in the world.
In a statement issued Wednesday, the BOK strongly condemned the revisions to the e-commerce transactions act proposed by the ruling party's three-term lawmaker Youn Kwan-suk, which curtails the central bank's role in the national payment settlement system.
“The revised bill is obviously a Big Brother law. If the revision is passed, the FSC will be able to collect information on every transaction made at big tech companies, such as Naver, through the Korea Financial Telecommunications & Clearings Institute (KFTC),” the BOK said.
According to the statement, the revised bill stipulates that big tech companies are obligated to provide all transactional information from customers to the KFTC, a non-profit organization managing several bank-to-bank payment systems in Korea.
“The revised bill even exempts big tech firms from having to abide by the rules of the Personal Information Protection Act. The FSC says the exemption is justified on the grounds of pursuing transactional transparency and customer protection. However, it's no different than setting up CCTV cameras in every household to prevent domestic violence,” the statement stressed.
The bank added that such a law, if passed, would become the world's only Big Brother law by overseeing every transaction made through big-tech firms. The statement said that even China's settlement authorities do not have the right to collect internal transaction records of big tech firms.
The BOK strongly objected to the revision that dates back to last July when the FSC set plans to strengthen supervisory control over digital financing to secure transparency in transactions involving big tech companies. The FSC designated the KFTC to assume the role of transaction settlement and clearing.
While the BOK and FSC were unable to see eye to eye on the matter, lawmaker Youn's revised bill on the e-commerce law aims to back the FSC, denying the central bank's roles and responsibilities in the national payment settlement system.
“The payment and settlement system is the foundation of the country's financial system, which supports smooth economic activities by economic participants, and safety and stability are the first and foremost priorities,” the bank said, stressing that those are the reasons why central banks operate and manage settlement systems in most countries.
Observers expect the bill to sit at the National Assembly as discussions continue. Another revision that acknowledges the BOK's settlement management control is also waiting for evaluation by the parliamentary National Policy Committee.