Naver, Kakao, LG ‘Will Bid to Participate’ in South Korean CBDC Pilot

CBDC Central Bank South Korea

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Tim Alper

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Tim Alper

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Tim Alper is a British journalist and features writer who has worked at Cryptonews.com since 2018. He has written for media outlets such as the BBC, the Guardian, and Chosun Ilbo. He has also worked...

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June 26, 2023 06:55 EDT

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The Bank of Korea (BOK), South Korea’s central bank, is set to pilot its prototype digital KRW beginning in August as the country increases the pace of its central bank digital currency (CBDC) adoption plans. And it looks as though three of the nation’s biggest tech giants are keen to take part.

Both Naver, the nation’s biggest search engine and the founder of the Line chat app (the dominant platform in Japan) and the domestic chat app giant Kakao, are set to bid to take part, per a report from Money Today. The conglomerate LG also hopes to submit a bid.

The media outlet claimed that a consortium comprising Naver’s financial arm, Naver Financial, and the blockchain firm Unchain were set to express their interest in joining the project, with a bidding process set to begin the weeks ahead.

Kakao’s e-pay arm Kakao Pay and its Ground X blockchain subsidiary will also likely submit a joint bid, as will a consortium comprising Shinhan Bank and the LG-run IT services provider LG CNS. Other likely bidders include the Shinhan rival KEB Hana Bank and the Center for Cryptocurrency & Blockchain Research at the POSCO-operated POSTECH tech university in Pohang.

The central bank once again maintained that its pilot did not indicate “that issuance will be forthcoming,” adding that there was no “pressing need” to make an “imminent launch.”

The pilot will run until December, with a second, more expansive stage of the pilot set to follow next year – although the bank is still yet to commit to launching a token. Seoul is widely believed to ensure it does not lose pace with its near-neighbors Japan and China, both of which are also moving ahead with their own pilots.

Beijing’s pilot now encompasses almost all of the nation’s wealthiest cities and tech hotspots – and is set to reach completion in time for a launch at or before the 2022 Winter Olympics in the capital.

TV Chosun reported that the BOK’s first pilot will focus on e-wallet management issues, as well as exchanges, deposits, remittances, and settlements.

The second phase of the pilot, meanwhile, will focus on “expanded functions such as cross-border remittances” and “strengthening” data-related protocols with an emphasis on “personal information protection.” The BOK hopes to have this second stage completed by June 2022.
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Learn more:
– Digital Yuan Not Intended for the International Stage, Say Experts
– Japanese Central Bank Starts Testing on Digital Yen

– Bahamas, Cambodia, China Lead Global CBDC Race, UK Launches Taskforce
– Prepare For ‘Uncertain Future of Money’ – US Intelligence Center

– Economists: CBDCs to ‘Flop’ if They Aren’t Designed as Stores of Value
– 2021 Trends in CBDCs: More Pilots, Maybe Some Launches, But Not For Retail