Bank of Korea Accelerates Deposit Token Initiative? …Removed 'Research' from Department Name

The Bank of Korea has decided to remove 'Research' from the name of the Digital Currency Research Office under the Payment and Settlement Systems Bureau, renaming it Digital Currency Office. This move appears to emphasize its role as an actual operating department.

According to industry sources on the 29th, starting on the 31st, the Bank of Korea will change the Digital Currency Research Office to the Digital Currency Office, and reorganize the Digital Currency Technology Team 1 and Digital Currency Technology Team 2 into the Digital Currency Technology Team and the Digital Currency Infrastructure Team, respectively.

An official from the Bank of Korea explained, "We wanted to make it clear that this is not just a research department."

Having been elevated from the Digital Currency Research Division at the beginning of this year, the Digital Currency Research Office has been responsible for central bank digital currency (CBDC) projects, leading 'Project Hangang' to test the use of digital currency. Although the first phase of Project Hangang testing was completed at the end of last month, the second phase, which was scheduled for the second half of the year, has been temporarily postponed due to discontent among participating banks.

Commercial banks remain more interested in stablecoins. However, the Bank of Korea stresses that CBDC-based deposit tokens are essentially no different from bank-centered stablecoins, except in that the issuer may differ, as requested by some parties. The move appears to be aimed at preventing CBDCs from being perceived as the antithesis of stablecoins.

Chang Yong Rhee, Governor of the Bank of Korea, said at a press conference on the 10th, "Project Hangang is intended to enable the safe introduction of won-pegged stablecoins," and added, "Whether it is a won stablecoin or a deposit token, a digitalized currency will be needed in the future."

Even after the name change, the Digital Currency Office plans to continue promoting CBDC-related projects, and is keeping in mind the possible resumption of the second phase of Project Hangang in the future.

Han Kyung-woo, Korea Economic Daily reporter case@hankyung.com