The Bank of Korea has announced that it is piloting a Central Bank Digital Currency. The pilot program will continue till December 2021, and during this time the bank will explore the design and requirements of such a currency, a review of the technology, and business process analysis and consulting. Once done, The Bank of Korea will test the currency.
CBDCs are not the same as any other cryptocurrency, These are regulated by the government and are pegged to the respective fiat currency.
With this announcement, South Korea has entered into the pool with Japan, China, and France who are actively exploring opportunities to release their CBDC. It will be the digital version of the South Korean won. However, according to a local news outlet, the Bank of Korea will still take time to roll out its CBDC, as the demand for cash in the country has not worn out completely.
This move from the Bank of Korea is not much of a surprise, as the country has fundamentally been blockchain and crypto-friendly. Many commercial organizations in South Korea are already using blockchain technology.
Other Banks are also Exploring CBDCs
China’s Central Bank has claimed to have almost completed the development of its CBDC, while the Bank of France also announced that it is researching the possibilities of a digital Euro.
On the other hand, the Bank of England is also conducting collaborative research on CBDCs along with the Bank of Canada, the Bank of Japan, the European Central Bank, the Sveriges Riksbank, the Swiss National Bank, and the Bank of International Settlements.
Commenting on the relevance of CBDCs, the Bank of International Settlements said, “Resilient and accessible central bank operated payment infrastructures could quickly become more prominent, including retail central bank digital currencies (CBDCs),”
Last week, the Bank of International Settlements urged Central Banks around the world to actively explore CBDCs.