Bank of Korea launches legal advisory panel for digital currency

Bank of Korea Governor Lee Ju-yeol bangs a gavel during a monetary board meeting at its headquarters in Seoul on May 28. Yonhap

By Lee Min-hyung

The Bank of Korea (BOK) said Monday it had launched a legal advisory panel to review possible regulatory hurdles in issuing a central bank digital currency (CBDC).

The panel consists of six experts in the finance and IT sectors ― including professors of commercial law and lawyers specializing in fintech. One of them is from the BOK's legal policy office.

Starting Monday, the panel will be in operation at least until the end of May 2021, the central bank said.

"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," an official from the bank said.

The launch of the panel is part of an initial step for the BOK's 22-month-long plan to develop its own CBDC. The drive started in March this year, and the central bank is enhancing its research capabilities to finish a pilot test on issuing a digital currency before the end of 2021.

The BOK established a digital currency research team in February to keep track of the latest trends at overseas central banks in the possible issuance of their digital currencies.

Global financial powerhouses ― such as the United States and Japan ― are on boosting research into CBDCs, in a bid not to fall behind the global financial paradigm shift. With central banks from a growing number of countries jumping on the digital drive, the BOK is also speeding up its digital currency initiatives.

In a recent speech celebrating the 70th anniversary of the central bank, BOK Governor Lee Ju-yeol underlined the need to enhance research and development in CBDCs, saying digital innovation is a crucial task private lenders as well as central banks should embrace amid the rise of contactless payment.

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