Facing Criticism, Bank Of Korea Governor Commits To More Virtual Currency Research

On October 25, 2017, it was revealed through reports that, following a parliamentary audit of the Bank of Korea (BOK) by the National Assembly of the Republic of Korea, the bank had conducted inadequate research on cryptocurrencies.

Appearing before the assembly, BOK Governor Lee Joo-yeol declared that cryptocurrencies, including bitcoin, cannot be accepted as currency and described the necessity for regulatory measures. "Regulation is appropriate for it because it is regarded as a commodity," said Lee. "It is not a regulation at the level of money … It is not a situation for the Bank of Korea to take action at present."

Lee went into greater detail about the integration of cryptocurrency and the interbank system:

“The possibility that the central bank’s digital money will be issued in the near future is likely to become a means of payment specialized for interbank transactions or central bank transactions.”

One lawmaker from the National Assembly’s Planning and Finance Committee who is critical of BOK's assessment is Democratic Party member Song Young-gil, who said that the BOK's research on cryptocurrency "is poor." He said that other central banks have done more extensive research on cryptocurrencies like bitcoin and Ether.

Song went on to explain that "there are more than 1,000 companies that can use bitcoin in Korea. However, the data provided [by BOK] shows insufficient numbers.” He went on to say:

“Virtual currency and blockchains are important research subjects, if you neglect them, you can lose the future market. The bank should do more research in the future.”

Lee considered the Korean legislator’s position, and concluded, "I fully agree with your point of view.” He went on to affirm, "The Bank of Korea will put more emphasis on virtual currency research."