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05/10/23
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South Korea Announces Pilot Program for a Potential CBDC
An official announcement has revealed that South Korea is now one of the countries launching a central bank digital currency (CBDC) pilot program. Bank of Korea (BOK) wants to take a look at a CBDC’s technical infrastructure by launching a pilot project.
The planned launch was jointly announced by the apex bank, the Financial Services Commission (FSC), as well as the Financial Supervisory Service (FSS) on October 4. Among the goals of the project is the assessment of the viability of a future monetary system grounded on “wholesale CBDCs”.
The Bank for International Settlements (BIS) is tasked with the provision of professional technical support. Public institutions and private banks will be involved in the pilot, and both wholesale and retail CBDCs will be tested.
Wholesale CBDC’s experimental framework will involve banks tokenizing their deposits and circulating them on a network being monitored by the BOK, the FSC and the FSS. They intend to start live testing of the retail CBDC in the fourth quarter of next year.
However, according to the BOK, the pilot trial does not mean that they will be implemented eventually. “The BOK has persistently pursued technological research related to CBDC. This test, building upon past achievements, represents a significant step towards creating a prototype for the future monetary system,” said Lee Myung-soon, the first deputy governor of the FSS.
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