- The Bank of Korea is creating a Virtual Asset Committee to oversee crypto affairs, particularly stablecoins.
- The central bank has also renamed several divisions to better reflect their role within the burgeoning digital asset ecosystem and in the institution’s planned creation of a won-based CBDC or stablecoin.
- Meanwhile, legislators have recently submitted several bills that aim to regulate stablecoins.
The Bank of Korea (BOK) is undergoing an internal overhaul in response to the growing influence of digital assets in the economy, particularly in the monetary sector. The central bank of South Korea, the issuer of the Korean won, has reportedly confirmed the creation of the Virtual Asset Committee to oversee the country’s cryptocurrency affairs. It is also renaming another division to emphasize its broader role within the digital currency space.
Bank of Korea Creates a Virtual Asset Division and Renames Digital Currency Group
According to Yonhap News, the BOK’s new Virtual Asset Committee will serve as an extension of the Financial Settlement Bureau. The group will be responsible for coordinating with the efforts of the national government and the legislature related to digital assets. Additionally, the team will monitor and respond to discussions and concerns pertaining to crypto, specifically stablecoins.
“We plan to respond to discussions related to stablecoins and virtual assets through the virtual asset committee and carry out cooperative work with the government, National Assembly, etc. during the legislative process,” said a BOK official to the news outlet.
Moreover, the BOK is renaming the Digital Currency Research Lab under the Financial Settlement Bureau to Digital Currency Lab. The move aims to better reflect the powers of the division, which is not just limited to research.
Furthermore, the central bank is changing the names of the Digital Currency Technology Team 1 and Technology Team 2 into Digital Currency Technology Team and the Digital Currency Infrastructure Team, respectively. Again, this is to highlight their roles within the institution.
The BOK’s CBDC Push
The Digital Currency Lab will resume its work on projects related to the BOK’s proposed Central Bank Digital Currency (CBDC). Despite the controversies hounding these assets, including concerns centering on user privacy and the government potentially expanding its control over people’s finances, South Korean central bank Governor Lee Chang-Yong reiterated that a won-denominated CBDC is no different than a won-based stablecoin, except in its issuer.
Nonetheless, the BOK is also working on a won stablecoin. For Lee, it does not really matter if the central bank ends up rolling out a CBDC or a stablecoin, as they will eventually “need a digital currency in the future.”
South Korea’s Stablecoin Legislation
The internal overhaul within the BOK coincides with the ongoing push of several Korean legislators for a bill on stablecoins. Following the same bill that Democratic Party of Korea lawmaker Min Byeong-Deok submitted last month, his ally Ahn Do-Geol and People Power Party’s Kim Eun-Hye have also introduced their separate versions of stablecoin bills. Even Kang Jun-Hyun, the floor leader on the National Assembly’s Political Affairs Committee, has already drafted a new bill covering stablecoins.
Analysts expect the lawmakers to deliberate and arrive at a compromise with their differing regulatory proposals for stablecoins soon. If the discussions go along smoothly, they will likely consolidate the provisions of the bills into a single act.
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