South Korea Plans for Central Bank Digital Currency (CBDC)

South Korea’s central bank, the Bank of Korea (BOK), is indicating its optimism towards the launch of a Central Bank Digital Currency (CBDC) by taking the initiative to form a special task force dedicated towards CBDC in 2020.

As per the document, published on Dec 26th regarding “Monetary Policy for 2020,” Bank of Korea on page number 10/11 under (Facilitating payment and settlement innovation and strengthening the oversight work) mentioned about the continuance of its research on distributed ledger technology, crypto assets, and CBDCs. The document cited that the BOK would play a crucial role as an overseer and also contribute to enhancing the security and payment settlement systems.

Intending New Recruitments for CBDC Research

BOK’s “Monetary Policy for 2020” denoting its plan of establishing the special task force for CBDC and would like to recruit digital currency experts for its comprehensive examination. The authority had posted the job opening in search of digital currency experts for CBDC, local media outlet TheKoreaTimes mentioned in its report on Dec 28th.

In the document, it is also mentioned that BOK is planning to arrange talks with the Bank of International Settlements (BIS) and other significant international groups and corporations to line up the information on CBDC while checking out the developments that are materializing in other central banks.

BOK Proposes to opt BIS Framework

Further, in the policy, it is displayed that BOK wants to deploy “BIS’s Principles for Financial Market Infrastructures (PFMI) to enact assessment principles for improving its oversight of domestic financial systems.”

As per the BIS website, PFMI refers to the international standards or norms for the financial market infrastructures to manage the market risks winged in the system. These include payment systems (the system used to settle financial transactions through the transfer of monetary value), securities settlement systems, central counterparties, trade repositories, and central securities depositories. “Issued by the CPMI and the International Organization of Securities Commissions (IOSCO), the PFMI is part of a set of 12 key standards that the international community considers essential to strengthening and preserving financial stability.”

For the readers, BIS is functioning as a bank for central banks which is aiming to aid central banks by cultivating its international cooperation for their undertaking of monetary and financial stability.