The Bank of Korea reportedly published a new book focusing on the legal concerns from the possible issuance of a CBDC, following its revelation of carrying out trials for its distribution in 2021.
Specifically, the book reportedly urges for adjustments to current regulations, to ensure the successful operation of a future CBDC.
The Bank of Korea has reportedly been utilizing blockchain features for supporting the management of transactions, carried out as part of the CBDC pilot initiative, which lasts for 22 months – started in April 2020 and will finish in December this year.
Running trial phases for the CBDC is reportedly the third stage of the overall initiative, following a focus on technological development and initial operational analyses in phases one and two.
The freshly-available book reportedly offered confirmation, regarding the timeline and scope, detailing that “the Bank of Korea is conducting an analysis of operational procedures for a CBDC rollout, and outside consulting is also underway. This year, we’re going to launch a CBDC pilot system in a virtual environment, and run tests to verify its functions and safety.”
”Transformation from cash to digital currency could raise GDP by as much as 3 percent. Digitalization of currency would accelerate currency circulation and reduce maintenance costs. It would also be an efficient way to realize negative interest rates, overall enhancing the government’s monetary management.“ The bank further disclosed the drive fueling the initiative and potential advantages of a future crypto coin.
The way a CBDC could prospectively support in sustaining negative interest rate policies has reportedly been recognized by different central bank representatives, including the deputy governor of Japan, throughout 2020.
“The U.S. dollar may be the standard currency for cash, but China is aiming to make digital yuan the new dominant medium. South Korea needs to develop strategies on what position the country will take in the new monetary era.”