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South Korea might put a 20% tax on profits made from crypto

South Korean central bank starts researching CBDCs in fear of China

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Updated on Mar 11, 2020
Reading time 2 minutes
  • South Korea's central bank seemingly took a u-turn on its stance towards CBDCs.
  • After it disbanded its original CBDC research team last year, with claims that digital won is out of the question, the BOK is now forming a new team to re-start its research efforts.
  • It is believed that the bank is doing so in fear of China's digital yuan, even though it still claims that it has no plans to actually launch digital won anytime soon.

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According to new reports, the central bank of South Korea is allegedly planning to launch its own CBDC team. Interestingly enough, the decision comes one year after the country disbanded its original CBDC research team.

Now, however, the growing fear of China and its own central bank digital currency caused the Bank of Korea (BOK) to return to the research of state-backed coins. Even so, the country’s local media outlet recently reported that the BOK is still trying to distance itself from actually issuing digital won.

According to the report, the BOK said that the fact that they decided to launch a research team does not indicate that a CBDC is about to arrive. Instead, the central bank is more interested in studying what the other countries are doing and how they are handling their own CBDCs.

BOK to research CBDC despite insisting that digital won will never be launched

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Despite this claim, the very fact that the country is once again forming a CBDC research team is a completely opposite move from what it said last year. Back then, the BOK insisted that there is no chance that digital won will ever be launched, which was the main reason why it disbanded its original research team in the first place.

Then, Facebook announced its Libra, and in response to that, China announced digital yuan. This turn of events seemingly forced the BOK to change its own tune in the last few weeks, and now, the bank seems to be looking into a possibility of CBDC issuance.

The bank released only a few details about the research team so far, such as the fact that it will be small, with only eight members. The members will be specialists from a number of areas, such as management, IT, economics, and HR.

It should also be noted that the bank never specifically mentioned China or its CBDC, although Kim Hye-mi, a reporter for E Today, wrote that this is the most likely reason behind such a large change in BOK’s stance.

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