South Korea Set To Initiate Task Force to Research on Domestic CBDC

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The Bank of Korea (the apex bank of South Korea) has announced its plan to put together a team to study the ins and outs of creating and operating a central bank-issued digital currency by the year 2020.

The BOK announced on the 27th of December in its monetary policy briefing for 2020, adding that it will keep working towards building on its ongoing study on DLTs, digital assets, and CBDCs.

Cryptocurrency Specialists Needed
As a means to further enhance its study agenda, the BOK intends to enroll more specialists from the sector. The establishment put up a job opening announcement for cryptocurrency specialists on the 10th of December, based on a news release by the Korea Times.

The BOK also mentioned that it will begin communicating with the Bank of International Settlements, to help it stay abreast with CBDC-related developments at other central banks.

The establishment stated that it intends to use the BIS’ Principles for Financial Market Infrastructures to set evaluation standards for the improvement of the country’s financial system.

The PFMI is an economic model created by the BIS to manage market risks across established financial infrastructures.

Categories of CBDC and Which Should Be Avoided
At the beginning of this year, the BOK expressed its disapproval on the matter of issuing a CBDC that was available to the public, stating that there was no tangible reason to do so.

The study of CBDCs globally has been categorized into 2 separate groups including retail CBDCs and wholesale CBDCs, with the former being generally accessible by the public and the latter being restricted to financial institutions only.

The BIS has cautioned in the past that a retail CBDC could pose a risk to the monetary sovereignty of traditional currencies and could cause economic instabilities.

Similarly, nations like France have already announced plans to launch a wholesale CBDC by 2020.