BOK Deputy Governor: "Sufficient Preparation Needed for Consensus and Technology in CBDC Adoption"

[Image source=Yonhap News]

[Asia Economy reporters Jung Yoon Lee and Hyunji Kwon] Lee Seung-heon, Deputy Governor of the Bank of Korea, stated, "There must be a broad consensus on the necessity of introducing Central Bank Digital Currency (CBDC), as well as thorough preparation regarding a perfect technical foundation and institutional issues."

At a meeting held on the 11th at the National Assembly hosted by the People Power Party's Special Committee on Digital Assets, Lee said, "The Bank of Korea is conducting pilot experiments to secure the technical foundation and is also conducting in-depth research on institutional issues and the ripple effects on the financial system."

He added, "Above all, in the case of stablecoins, since they are highly likely to be used as a means of payment like currency, their impact on the current monetary system is significant, requiring special responses from central banks," and stated, "Central banks are conducting research and development on CBDCs to ensure that central bank money functions as the foundation of currency and payment systems even under the digital economy system, thereby supporting financial and economic stability." Stablecoins refer to virtual currencies designed to be pegged to fiat currency.

To secure the technical foundation, the Bank of Korea has been conducting pilot experiment research since August last year until this month to examine the technical feasibility of distributed ledger-based CBDCs. Additionally, it is conducting in-depth analysis on the impact and response measures of CBDC introduction on major responsibilities and roles such as monetary policy and financial stability, and is conducting preliminary checks on various institutional issues that may arise upon CBDC introduction through the operation of an external legal advisory group.

A Bank of Korea official stated, "At this point, it is difficult to specify the exact timing for the introduction of CBDC in our country, but there is a need to further strengthen CBDC research and development to effectively respond to the acceleration of the digital transformation of the economy and the decline in cash usage," adding, "While expanding research on technology, institutions, and ripple effects, we plan to solidify the foundation for CBDC introduction by expanding cooperation with domestic related organizations, international organizations, and overseas central banks."

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