Bank of Korea to kick off wholesale CBDC pilot

South Korean authorities are to chart out a new era of digital payments, carrying out a pilot test for a central bank digital currency, or CBDC, to determine how it could be used as savings and transactions vehicles, according to an announcement made by related authorities on Wednesday.

From left: Bank of Korea Senior Deputy Gov. Ryoo Sang-dai, Financial Services Commission Vice Chairman Kim So-young and Financial Supervisory Service First Senior Deputy Governor Lee Myung-soon speak at a press briefing held at the BOK's headquarters in central Seoul, Wednesday. (Yonhap)

South Korea’s central bank will be launching a pilot program for its central bank digital currency (CBDC) to explore infrastructure requirements, according to an Oct. 4 joint statement by the Bank of Korea (BOK), the nation’s Financial Services Commission (FSC) and the Financial Supervisory Service (FSS).

Fast Facts

  • According to the announcement, the pilot will assess the viability of a future monetary system based on wholesale CBDCs.
  • A wholesale CBDC is primarily used by financial institutions for interbank settlements rather than every day transactions that are enabled by a retail CBDC.
  • In South Korea’s CBDC pilot, participating banks will tokenize their deposits and circulate them in the network, which will then be monitored by the BOK, the FSC and the FSS.
  • The Bank of International Settlements (BIS) will provide technical support for the trials.
  • The live testing of South Korea’s retail CBDC is planned to start in Q4 of 2024.
  • South Korea joins a growing number of Asian countries exploring CBDCs. The Hong Kong Monetary Authority launched its CBDC pilot program in May while neighboring Bank of Japan started discussions with 60 for a pilot program in July.
  • At least 130 countries representing 98% of global GDP are exploring CBDCs, up from 35 countries in May 2020, according to the Atlantic Council.

ZOLTAN VARDAI
(2023.10.04) “Bank of Korea to kick off wholesale CBDC pilot”
retrieved from https://forkast.news/bank-of-korea-kick-off-cbdc-pilot/

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