The Bank of Korea is starting CBDC trial this summer
South Korea’s central bank, The Bank of Korea, is allowing bids to come in for the role of technology supplier for its upcoming central bank digital currency (CBDC) trial. This according to a report by local news outlet Korea Herald on Monday.
The trial is detailed to be conducted in a “virtual environment” in two stages. The first stage will run from August to December 2021. For the trail a total of $4.4 million (4.9 billion won) is allocated.
The bank officials stress that the the Bank of Korea currently has no plans to issue its digital currency and that the pilot’s goal is only exploratory. They would only like to look into its feasibility and overall effectiveness, as a bank official said:
“We are launching the pilot test to see how [a] CBDC could be used as a form of safe asset when the share of cash transactions decline significantly. The necessity to issue its digital currency is not urgent at the moment.”
Two stages
During the first stage of the trial that will run from August to December 2021, the focus will be on the basic functionalities of CBDC and will include testing the issuance and circulation of the supply.
In the second stage, which will run up to June 2022, the bank will get into more detail and test cross-border transactions and offline payments. As part of the trial, the Bank of Korea will also study digital currencies in relation to user privacy protection.
Several Korean tech giants, Naver, Kakao, and LG, have already expressed their interest in the central bank’s forthcoming trial. South Korea’s largest industrial conglomerate, Samsung is also expected to join the bid.
Central banks and governments across the globe have been investigating and trialing CBDC’s. Although many appear conscious about the introduction of a new form of digital money, several countries have made significant advancements. China is close to the end of trialing a digital yuan and intends to implement their digital yuan close to the Beijing 2022 Winter Olympics. In the meantime Japan is in the first phase of their trials, which will run up to March 2022.
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Source: igaming
