S Korean MPs to Create Law that Distinguishes CBDCs from Crypto – Is Digital KRW Launch Imminent?

CBDC South Korea

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Tim Alper

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Tim Alper

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Tim Alper is a British journalist and features writer who has worked at Cryptonews.com since 2018. He has written for media outlets such as the BBC, the Guardian, and Chosun Ilbo. He has also worked...

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Last updated: 

October 22, 2023

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South Korea is edging closer to a central bank digital currency (CBDC) launch, with a new draft law set to create legal terminology for CBDCs.

Herald Kyungjae reported that a new bill will soon roll out in the National Assembly, and will include clauses that spell out the legal differences between cryptoassets and CBDCs.

The media outlet reported that per an unnamed source close to the National Assembly’s Political Affairs Committee, lawmakers plan to “explicitly exclude” a “CBDC issued by the Bank of Korea and services related to the token” from regulation laid out in the forthcoming Virtual Assets Act.

The plan is reportedly the brainchild of the Democratic Party lawmaker and committee member Kim Han-gyu.

Kim reportedly wants to “prevent policy confusion.”

“Clearly distinguishing” between a CBDC and “the virtual assets market” is important, the MP claimed.

The media outlet remarked that some regulators and MPs were initially worried that the clause might cause confusion, and were in favor of omitting it.

But Herald Kyungjae wrote that the mood “has changed since then.”

This means that the regulatory Financial Services Commission (FSC) is set to “make a concession” and officially endorse this clause at a meeting held this week.

Countries like Japan, South Korea, and China are leading the way in adoption, driving innovation in blockchain technology.

It's time for the US to reassess its approach and embrace the potential of decentralized finance. #digitalassets #blockchain #crypto

— Tom Ambrosia (@AmbrosiaThom) April 17, 2023

Is South Korean CDBC Moving Closer to Rollout?

The Bank of Korea (BOK) is yet to officially announce the launch of a digital won.

But it has become an open secret that the nation feels it is playing catch-up to Beijing in the CBDC stakes.

China’s digital yuan is making fast progress.

And the coin will make history next month when it is used to pay public service workers in a city of 1.5 million residents “100%” of their salaries.

Both the BOK and its Japanese equivalent have in recent years fast-tracked their own digital fiat projects.

But neither have yet officially stated that they will launch a coin.

Bank of Korea given right to request info from local crypto firms @bok_hub has expressed concerns over risks from stablecoins pic.twitter.com/nncU8sgaW1

— Noir Ventures (@Noir_Ventures) April 24, 2023

The BOK is also set to push for further legal amendments.

It could ask the government to spell out the differences between cryptoassets and a digital KRW in the terms of the Bank of Korea Act (1997).

The media outlet noted:

“There is a view that the BOK will speed up the introduction of its CBDC.”