South Korea Plans to Enlist 100,000 Participants for CBDC Trial in 2024
The Bank of Korea (BOK) is launching a pilot program for its central bank digital currency (CBDC), enabling 100,000 Korean citizens to make payments using deposit tokens.
The Bank of Korea (BOK), South Korea's central banking authority, has announced plans to conduct a pilot program involving its central bank digital currency (CBDC). This program, set to commence between September and October 2024, will last for three months and involve 100,000 Korean citizens. These participants will be able to use deposit tokens to purchase goods, as reported by Korea Times on November 23.
The pilot restricts the use of the CBDC to payment purposes only, prohibiting participants from storing, exchanging, or transferring the digital currency to others. The primary objective of this trial is to assess the practicality and efficiency of the CBDC's issuance and circulation.
In addition, the BOK is partnering with the Korea Exchange to test the digital currency in a simulated environment for carbon emissions trading. This test aims to explore the viability of 'delivery versus payment' transactions. The BOK's statement, as mentioned in the report, indicates the possibility of conducting additional pilot projects if banks propose innovative individual projects.
This announcement coincides with the visit of Agustin Carstens, the general manager of the Bank for International Settlements (BIS), to Seoul. Carstens has referred to the Korean CBDC initiative as the 'digital won.'
The BOK had previously declared the initiation of the CBDC pilot in October, focusing on both retail and wholesale applications. The pilot will include collaboration with private banks and public institutions, with the BIS providing technical expertise.
The BIS is actively involved in advancing global CBDC initiatives. It supports the Swiss National Bank in developing a wholesale CBDC and is contributing to a joint platform involving the central monetary authorities of China, Hong Kong, Thailand, and the United Arab Emirates. Additionally, the BIS is working on a proof-of-concept for a transaction tracker with the European Central Bank, among other international projects.
