Financial authorities of South Korea have announced the launch of a task force service aimed to enhance banks’ business practices and overall management. The task force will incorporate the work of multiple scholars, including officials from major industry associations, such as the Financial Supervisory Service (FSS) and the Financial Services Commission (FSC).

Following the introduction of the task force, multiple measures for improving the management and administration of banks will be released. These include the possible launch of a small license or a system of certification for a lender’s every separate role in the bank. The authorities also consider strengthening the `clawback` provisions for bank executives while allowing shareholders around the area to vote on their remuneration.

The Financial Supervisory Service and the Financial Services Commission co-hosted their first meeting about the task force, while the specific measures that will take place in the project are expected to be traced by the end of June. South Korea’s development in the banking system The Bank of Korea (BoK) announced in November of 2022 the development and testing process of a program that was designed to facilitate cross-border remittances. This functioned by linking different central bank digital currencies (CBDC) for multiple other countries around the world.

During the project, the central bank completed a 10-month experimental procedure into a digital South Korean won and tested the use of its own CBDC to purchase non-fungible tokens (NFT). While focusing on their progress, authorities also mentioned that the CBDC designs and technologies can’t be perfect, as they can’t satisfy all customers' goals, preferences, or expectations simultaneously. Furthermore, as its CBDC trial started in 2021 and completed the first two stages in January 2022, the Bank of Korea decided to improve its overall compliance at the sacrifice of privacy services.

To build the foundation of this endeavour, BoK established a virtual money laundering and terrorism financing monitoring system, while also facilitating data submission. This experiment found that a central bank digital currency has the capability of processing up to 2,000 transactions in a second. It also discovered that distributed ledger technology does not yet have the scalability needed for a retail CBDC.

The news came right after South Korea released its plans to offer citizens a smartphone blockchain-secured digital identity. The scheme focused on boosting economic growth and improving customer experience as numerous people work from home, explore the metaverse, or chose to make cashless payments. Through this decision, services that were not able to have a full transition into the online space had the opportunity to do so.

To identify themselves, customers rely on resident registration cards. This proposal was set to embed those IDs with an application that clients can download into their phones. South Korea also announced that the new digital IDs are set to launch in 2024.

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