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Tech Titans Kakao, Naver and SK in Battle to Test South Korean CBDC

Tech Titans Kakao, Naver and SK in Battle to Test South Korean CBDC 101
Source: Adobe/anekoho

Some of South Korea’s biggest tech and telecommunications giants will duke it out for the right to pilot the central Bank of Korea (BOK)’s forthcoming digital won.

Per KBS and Chosun, the bidding process has become a “three-way battle” between the search engine and chat app operator Naver, the chat app service, banking and e-commerce firm Kakao and the telecom heavyweight SK.

The BOK has now closed the bidding, with consortiums or solo bids led by Kakao’s blockchain subsidiary Ground X, the Naver affiliate Line Plus and SK’s SK C&C arm vying for the BOK’s approval.

Chosun added that LG CNS, the IT services arm of the electronics giant LG, is a member of the Line Plus consortium.

Samsung’s own IT services and blockchain subsidiary, Samsung SDS, reportedly dropped out of the bidding process.

Both Kakao and LG have created digital won-compatible platforms, and appear keen to begin doing digital currency-related business.

The BOK is set to announce its decision on which of the bids to accept before the end of the month. The winning consortium or company will conduct a 10-month pilot beginning in August.

The BOK wants operators to test its prototype central bank digital currency (CBDC) in areas such as cross-border remittance, “digital asset” purchasing and offline payments, as well as bank deposits and e-commerce payments.

The pilot, the BOK said, will be divided into two stages. The first will check the functionality of the prototype digital KRW, while the second will address privacy-related issues and potential further usage cases.

The pilot will wrap up in June 2022, and has been allocated with a budget of up to USD 4.3m.
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