Bank of Korea to Establish Digital Asset Task Force

Crypto Regulation
Bank of Korea to Establish Digital Asset Task Force

In their 2020 monetary policy, the central bank for South Korea revealed that they are actively looking to set up a digital currency task force with their existing personnel, but will also recruit additional experts to look into the prospects of a central bank digital currency (CBDC). Central banks from China to the Bahamas are studying sovereign digital currencies to understand the benefits they pose for payments and finance, December 27, 2019.

South Korea Enters CBDC Race

A central theme in 2019 has been the torrent of central banks that have stepped up to announce their desire to study CBDCs, but this only started to grab major headlines once it was divulged that China will be rolling out a sovereign digital currency in the near future.

Asian central banks, in particular, have been very open to studying digital currencies to understand how it can help their country flourish without conceding their control over the rhythm of the economy. China, Japan, India, and now South Korea are committed to a digital future, having pushed various cashless agendas before they ever decided to study digital currencies.

As per the policy, the Bank of Korea will take the initiative to open dialogues with supranational financial agencies like the Bank for International Settlements (BIS) to come to a comprehensive conclusion on the efficacy of digital currencies, and the long-term effects they can have on government oversight across payment and settlement systems.

CBDCs Don’t Threaten Public Ledgers, They Empower Them

Contrary to a lot of the discussion going on regarding the effect of sovereign digital currencies on decentralized networks like Bitcoin, these authoritative systems only strengthen the value proposition of decentralization.

Imagine a future where cash is slowly phased out of the economy. From a mortgage down payment to buying a pack gum, the financial institutions you work with, and the government, will know exactly where you spent all of your money. Financial surveillance will hit dystopian levels, bringing more and more users towards protocols like Bitcoin.

But for Bitcoin to truly be an alternative to the traditional financial system and what it’s shaping up to be, on-chain privacy is an absolute must. Hopefully, in 2020, more focus is placed on the integration of privacy-enhancing algorithms like Schnorr and Taproot.