On June 14, new reports suggest that the Bank of Korea has formed a legal advisory panel to review potential legal issues surrounding digital currency. The launch is a part of a series of initiatives by the central bank to speed up the country’s Central Bank Digital Currency (CBDC) development.
According to the announcement, the panel consists of six experts in the finance and IT sectors. They include three professors of commercial law, two lawyers specializing in FinTech, and one is a Bank of Korea official. The panel was established to advise, evaluate, and review legal issues surrounding CBDC adoption. It is expected to operate till May 2021 with a road map for the future of the country’s CBDC.
Recently, in a speech during the 70th anniversary of the central bank, BOK Governor Lee Ju-yeol noted the necessity to enhance research and development of CBDC, saying digital innovation is a crucial task amid contactless payment. The governor called for private lenders as well as central banks to embrace the innovation.
CBDC Pilot Tests Continue in China
The need for contactless pay has seen many countries making more progress in their research and development of CBDC. China emerged as a world leader in CBDC when it launched its digital currency pilot tests earlier this year. The currency, referred to as Digital Currency Electronic Payment (DCEP), was to plot launch in Shenzhen and Suzhou.
The process of distribution was to mirror physical cash through four state-owned banks. Mobile payment app Alipay contributed to the research of currency development and provided a distribution and payment channel. DCEP was to be used as a part of a transport subsidies scheme for local government and enterprise workers.
However, the Chinese authorities postponed the research on the digital yuan in the first quarter due to the coronavirus epidemic. The policymakers and research staff of DCEP went through postponed work resumption, which held back the project. As the country gradually returns to normalcy, rumors about digital yuan currency testing are surfacing.
There are allegations of digital yuan being used as a pilot in the Xiong’an Smart City program. This follows a promotion conference that was held on April 22 in the city located near Beijing. The conference was joined by a variety of local government institutions, heads of companies responsible for Alipay and WeChat, and companies in the retail industry.
It’s a reasonable deduction that the conference confirms the rumor of digital currency testing in Xiong’an. CBDC research is gaining popularity among central banks globally, which are projected to fix the financial system amid this pandemic.