Bank of Korea Plans To Organize Task Force For Central Bank Digital Currency Research
Bank of Korea Plans To Organize Task Force For Central Bank Digital Currency Research
December 28, 2019
Bank of Korea Plans To Organize Task Force For Central Bank Digital Currency Research
Bank of Korea Plans To Organize Task Force For Central Bank Digital Currency Research
December 28, 2019

The Bank of Korea (BOK), the central bank of South Korea, plans to organize a task force dedicated to central bank digital currency (CBDC) research in the New Year.

On December 27, it has been reported that BOK said that it would continue to build on its existing research into distributed ledger technology, crypto assets, and CBDCs and to play an active role in overseeing and enhancing the security of payment and settlement systems. 

However, as part of its CBDC research agenda, BOK apparently plans to recruit additional experts in the field.

According to a report from the Korea Times, the institution had posted a job listing for digital currency experts on December 10.

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In parallel to organizing its task force, BOK says that it will actively engage in discussions with the Bank of International Settlements (BIS) and other relevant international entities to keep abreast of CBDC development at other central banks.

Likewise, the bank says that it plans to use BIS’ Principles for Financial Market Infrastructures (PFMI) to enact assessment principles for improving its oversight of domestic financial systems.

It has been analyzed that the PFMI is a framework established by the BIS for managing market risks such as credit, liquidity, custody, settlement, operational and investment risks across payments systems, securities settlement systems, trade repositories, and other infrastructures.  

However, having examined the possible legal and social effects of a CBDC project, BOK concluded in January 2019 that there was no reason for the bank to issue a CBDC that would be available for the wider public in the near future.

The CBDC research by central banks globally has broadly separated the study of the benefits of “retail” or “general purpose” CBDC accessible to the general public from “wholesale” variants of CBDCs, which would be limited for use by financial institutions.

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Thus, in the past, the BIS has warned that “a general-purpose [retail] CBDC could give rise to higher instability of commercial bank deposit funding” and potentially fuel faster bank runs.

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Ishita Bora

Ishita Bora is a Senior Content Creator at Digital Notice Media Labs with experience of 1.5 years. She has completed her Master's Degree in Language and Linguistics in 2019 from Gauhati University, India. Her interest lies in blockchain technology and cryptocurrency space. She loves writing about blockchain and other blockchain-related articles.