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100,000 South Koreans Will Start Using CBDC Next Year

Tim Alper
Last updated: | 1 min read
The Bank of Korea in Seoul, South Korea.
Source: tktktk/Adobe

The Bank of Korea (BOK) has announced that 100,000 South Korean citizens will start making “real-world” CBDC transactions next year.

The central bank said that the digital won will be tested in the “fourth quarter of the next financial year.”

Per the media outlet Newsway, the BOK will ask partner banks to find suitable customers for its first digital KRW test group.

The BOK is still yet to officially decide whether it wants to issue a CBDC.

But the bank has fast-tracked the project, in part due to the rapid progress of China’s digital yuan pilot.

The bank has previously insisted that South Korean lawmakers must have the final say on whether it can issue a CBDC.

But the bank said it wants members of the “general public” to join the trial, and the media outlet wrote:

“Applications will be accepted via [BOK partner] banks from September to October 2024. The number of participants will be limited to a maximum of 100,000.”

The headquarters of the Bank of Korea, in central Seoul, South Korea.
The headquarters of the Bank of Korea, in central Seoul, South Korea. (Source: Otraff [CC BY-SA 3.0])

South Korea: The Next Nation to Begin CBDC Pilots?

The BOK says that it will initially focus on the issuance of CBDC “digital vouchers” in the payments sphere.

These could include, for instance, CBDC-powered childcare vouchers that can be redeemed at daycare centers.

Commercial banks will distribute the vouchers to approved customers, as the BOK focuses on “CBDC usability”-related matters.

And the bank said that it will not seek to authorize “real-world” P2P-type payments between individuals “other than for testing purposes.”

The BOK added that partner banks, merchants, and service providers would continue to operate in a regulatory “sandbox.”

The bank said it would work with the country’s two top financial regulators on the project: the Financial Services Commission and the Financial Supervisory Service.

The bank promised to “consult” with “related organizations” to “review related laws” prior to the pilot.

In April, lawmakers unveiled legislation that will create a legal distinction between CBDCs and cryptoassets.