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South Korean Central Bank to Launch CBDC Pilot in 2021

Tim Alper
Last updated: | 1 min read

The South Korean central bank, the Bank of Korea (BOK) has announced that it is to begin a central bank digital currency (CBDC) pilot next year, in conjunction with major firms and domestic banks.

Source: Adobe/fotopoly

Per Seoul Shinmun and the Fourth Journal, the BOK has stated that it has completed the design and “technical checks” on the digital won and is currently on the “second phase” of its project, a stringent analysis of processes and “external consulting” with private-sector firms.

The BOK stated that the token would be distributed “through financial institutions” such as banks in the “same way” that cash is circulated.

The BOK is yet to announce an exact timeline for its pilot, but explained that it will create a public-private collaborative testbed environment for the digital won, with “private institutions” charged with distributing the tokens, and a small number of companies set to accept payments in the new currency.

No information has yet been released about the possible identity of the banks and private sector companies that will take part in the pilot, but a local banking professional familiar with the matter has told that there has been no shortage of interested parties making their intentions known to the BOK – particularly within the banking community.

A number of South Korean banks have already begun to develop products and services that would be compatible with a digital fiat, including wallets and advanced banking apps capable of processing digital fiat transactions.

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