Some legal changes would be needed before a potential central bank digital currency launch in South Korea, research indicates.
The Bank of Korea (BOK) has published the results of research it conducted last year on the legal issues surrounding central bank digital currencies (CBDC).
The research concludes that a CBDC would meet the requirements of currency legislation and could be freely exchanged with cash as the two share the same legal status. Therefore it would be reasonable to treat a CBDC in the same way as cash deposits held by financial institutions, CoinDesk Korea reported Monday.
For this reason, it is proposed the BOK, South Korea’s central bank, should have the legal basis for applying positive or negative interest rates on a future CBDC. It will also need to be decided whether the BOK would exchange the CBDC for cash with consumers directly or via an intermediary agency.