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The Central Bank of Korea (BOK) has released its 2022 Payment Systems Report.Reports that system monitoring was successful Saidand are gearing up for the future of Central Bank Digital Currencies (CBDC), with extensive discussions on stablecoin regulation.
According to the report, the BOK-Wire+ high-speed payment system has been upgraded to real-time gross settlement (RTGS) and adopts the ISO 20022 standard, which is expected to be implemented in 2028. The bank will also strengthen its oversight of “big tech” payment services and strengthen its ability to respond to “IT operational risks.”
The Bank of Korea continued preparations for the possible introduction of CBDC, including investigating the use of smart contracts, offline payments via short-range wireless communication, and cross-border payments. In the second half of this year, the bank connected 14 banks and the Korea Financial Communications Clearing House (KFTCI) to the simulated CBDC system to verify its functionality.
“In line with these international trends, future South Korean cryptocurrency regulations may include different rules for stablecoins.
Stablecoin issuers and related service providers will need to apply stricter rules regarding entry regulations, including: pic.twitter.com/czbhJAvqaY
— Joshua Rosenberg (@_jrosenberg) July 19, 2023
The system processed 2,000 transactions per second. While this figure is higher than most domestic payment systems, it slows down once capacity is reached, so further improvements are needed, the report notes.
The bank attempted to settle CBDC transactions using a zero-knowledge proof protocol to improve privacy. This allowed us to hide the wallet address and payment amount of the transaction, but it slowed down significantly and the security implications of zkCBDC have not been investigated. Homomorphic encryption may also be considered.
RELATED: CBDC Should Protect Privacy, Not Surveillance Tool: Former CFTC Chair
The Bank of Korea plans to strengthen research on CBDC, consider CBDC-based tokenized deposits, and expand the scope of research between the bank and KFTCI. said:
“The main focus of the Bank of Korea’s research is to identify a CBDC operating model that will minimize adverse effects on the stability of the financial system and the effectiveness of monetary policy.”
The report notes that there has been “concrete” progress towards cryptocurrency regulation in the country with the introduction of the Framework Law on Digital Assets Law, but the regulatory framework is still too far to allow payments in cryptocurrencies. too imperfect. The bank reiterated that it is also working on discussions on stablecoins.
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