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South Korean Central Bank Turns to Private Sector for CBDC Help

South Korean Central Bank Turns to Private Sector for CBDC Help 101
Source: Adobe/slawavorster

South Korea is a step closer to welcoming a central bank digital currency (CBDC), with design and implementation reviews complete – and private companies now set to get involved.

Per reports from Seoul Kyungjae and Chosun, the nation’s central bank, the Bank of Korea (BOK), now says it wants to build a “virtual” pilot payment and settlement “ecosystem” for its CBDC, a digital version of the won (KRW).

The BOK will tomorrow post details of its requirements for companies bidding to become from testbed participants on a “consultancy” basis.

The BOK stated that would-be companies will need to meet a set of “minimum requirements” in order to take part in the program. Companies will have around a month to submit their bids to the BOK, with the central bank hopeful of having the testbed up and running no later than early 2021.

However, insiders believe that such timelines are worst-case scenarios – and that Seoul is in fact hoping to catch up with the People’s Bank of China’s digital yuan project, which Beijing is hoping to expand to a near-nationwide pilot in the near future.

And although China seems to be committed to launching the digital RMB, Seoul says that it is yet to decide for certain if it will indeed launch a digital won – despite the BOK’s breakneck efforts.

The media outlets reported that the BOK has now completed its CBDC research into design, tech requirements, adoption and issuance and “will proceed with second-stage CBDC work” – which will include “process analysis and external consulting.”

They add that the pilot will help design an operating process and system architecture for the as-yet-unnamed CBDC with the aid of “consulting companies,” moving on to create a full issuance and adoption plan.

Last month, the BOK announced the creation of a special CBDC legal advisory unit.
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