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South Korea is set to take a major step in its central bank digital currency (CBDC) journey by launching a real-world transaction trial involving 100,000 consumers.
According to a local report, this trial, conducted by the Bank of Korea in collaboration with the Financial Services Commission and the Financial Supervisory Service, will involve seven major commercial banks issuing deposit tokens backed by CBDC.
This initiative follows years of research and previous pilot delays. If successful, this trial could clear the way for a full-scale rollout of a government-backed digital currency.
These tokens will be used for retail transactions at selected merchants. The test, expected to commence in March, will allow participants to make transactions using QR codes, with a spending limit of 1 million won (approximately $688).
According to the local report, the participating banks include KB Kookmin, Shinhan, Hana, Woori, NH Nonghyup, Industrial Bank of Korea, and Busan Bank.
The upcoming trial will be a collaborative effort between major financial institutions and select retailers.
“The goal is to begin the test by early next month at the latest. Since it is an issue that requires cooperation with multiple organizations, there is a possibility that the schedule will be delayed.”
A Bank of Korea spokesperson emphasized that while the goal is to commence the pilot this month, logistical complexities could push the start date to April.
Cecilia Skingsley, Director of the BIS Innovation Hub, remarked that the project’s outcomes could serve as a valuable case study for other advanced economies exploring digital currency adoption.
South Korea’s CBDC trial has attracted global attention, particularly from the European Union and international financial bodies such as the Bank for International Settlements (BIS).
Recent discussions among policymakers have highlighted concerns over the country’s high crypto adoption rates and the need for state-controlled digital solutions.
Lawmakers from the Democratic Party have even suggested incorporating Bitcoin into South Korea’s strategic reserves, drawing parallels with U.S. policy considerations.
The introduction of a government-backed digital currency aligns with broader policy shifts in South Korea’s financial sector.