Announced during a Dec. 26 report titled “Monetary Policy for 2020,” the Bank of Korea will hire experts to review the consequences of distributed ledgers, cryptocurrencies and CBDCs on financial settlements and security. The group also will “keep an eye” on other countries’ experiments with CBDCs.
The task force might be formed as early as January 2020, reports CoinDesk Korea.
In the past year, the U.S. Federal Reserve System and therefore the European financial institution announced investigations into digital replacements for cash, because the People’s Bank of China gets able to pilot its “digital yuan” in 2020. State-backed digital currencies may improve international and internal settlements also as mitigate fraud, say backers.
“[T]he bank will enact assessment principles, reflecting domestic conditions, to enhance the effectiveness of its oversight of the payment and settlement systems,” bank officials said within the document.
Bank of Korea’s earlier research into digital currencies has come and gone. A previous task force was disbanded in January 2019 after a year of studying virtual currencies and CBDCs.
The bank found that CBDCs could adversely affect the demand for traditional banking services, which could impact financial stability.
In October, Hong Kyung-sik, the top of the Bank of Korea’s Banking and Finance Bureau, said a complicated economy with a system wouldn’t enjoy CBDCs.
Still, the bank hired an expert to review cryptocurrencies this past September.
According to the Bank for International Settlements, a “majority” of central banks in developed and emerging economies (of 63 surveyed) are researching CBDCs.