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South Korean Central Bank to Speed Up CBDC Project
The South Korean Central Bank is set to accelerate its Central Bank Digital Currency (CBDC) project. It plans to pilot its digital KRW with a group of 100,000 citizens later this year. The Bank of Korea (BOK) will test the usability and deposit functions of the digital KRW with the group at the end of 2024.
Real-world Tests in Q4
In October last year, the BOK announced plans to conduct CBDC usability tests with the nation’s top regulators, the Financial Services Commission and the Financial Supervisory Service. Lawmakers have also created a law that distinguishes between CBDCs and cryptoassets like Bitcoin (BTC).
- The BOK plans to build a pilot CBDC network
- Three types of tokens will be issued and distributed based on institutional CBDC models
- The launch is expected in the fourth quarter of the year
Real-time Tests in 2024
The bank will perform real-time transaction tests with ordinary citizens to pilot the use of CBDC in commercial settings. However, critics warn that a South Korean CBDC launch could impact the country’s fintech and banking sectors.
Professor Seo Ji-yong of Sangmyung University mentioned that CBDC commercialization in South Korea will take time, and private companies may need to prepare corresponding projects as the CBDC project progresses.
Retailers Could Benefit from CBDCs
Some of the nation’s biggest tech firms and banks have already begun CBDC operations. The BOK official highlighted that using CBDC could help reduce fees for merchants compared to existing card transactions.
In Russia, analysts believe that the domestic retail sector would be a significant beneficiary of the digital ruble, while the banking sector might face potential losses. However, the BOK reassured the private sector that the CBDC’s commercialization aims to offer innovative services and opportunities for industrial development.
Ian is a cryptocurrency enthusiast blending humor with professionalism. With an engineering background and a storyteller's heart, he simplifies the blockchain world with sharp analysis and a touch of wit. At Cryptowire, he brings his unique perspective to make digital financial innovation accessible to all.
