"Bank of Korea: No Legal Intervention in CBDC... Delegated Issuance Preferred"

Payment and Settlement Conference Held on the 18th

[Asia Economy Reporter Jang Sehee] As the introduction of central bank digital currency (CBDC) becomes a reality, there is a claim that the Bank of Korea should operate it on a consignment basis without legal intervention. This is based on the judgment that it is excessive for the central bank to bear transaction liability.

On the 18th, Professor Jeong Kyung-young of Sungkyunkwan University School of Law stated in a presentation at the online 'Payment System Conference' that "It is not appropriate for the central bank to bear transaction liability, so it is necessary to adopt an issuance method (consignment method) where the central bank does not legally intervene." This conference examined the concept and impact of CBDC, as well as legal and technical issues in designing central bank digital currency.

In Korea's case, the Bank of Korea will decide whether to introduce CBDC after completing a pilot test next year. However, legal and technical issues must be resolved for this.

First, Professor Jeong viewed that CBDC has the characteristics of money and can function as a final settlement means regardless of the granting of legal tender status. He believed that even if legal tender status is not granted to CBDC, it is a debt of the Bank of Korea, so uncertainty is not a major issue. Rather, he pointed out that social costs are expected regarding the convenience, stability, and trust in the use of the new currency.

Furthermore, regarding unauthorized transactions, he saw that responsibility would follow the electronic financial service providers and, exceptionally, the users. Professor Jeong added, "If unauthorized transactions occur in CBDC usage transactions generated by the central bank, the central bank's responsibility could be an issue."

Additionally, Professor Jeong said that for the introduction of CBDC, considerations should include ▲security ▲protection of existing financial system functions ▲convenience of currency ▲financial inclusion ▲autonomy of financial transactions.

This content was produced with the assistance of AI translation services.