The Bank of Korea Is Preparing to Introduce ‘CBDC’ Due to the Decrease in Cash Payments

This is measure that considers a surge in non-contact payments They will discuss technical and legal requirements within this year They plan to build a pilot system by the end of next year CBDC is similar to the cryptocurrency in the private sector

The Bank of Korea is preparing to introduce CBDC (Central Bank Digital Currency). CBDC issuance is expected to accelerate as COVID-19 increases non-contact payments and decreases cash payments.

On the 6th, the Bank of Korea announced that it will conduct CBDC pilot test nest year. CBDC pilot test will last 22 months until the end of next year. The Bank of Korea plans to review the technical and legal requirements for introduction of CBDC this year, and plans to build and test pilot system from January to December next year.

The Bank of Korea finishes CBDC design and requirements definition until July, completes implementation technology review until August, and starts business process analysis and consulting from September to December. The timing may be different depending on the situation, but the Bank of Korea plans to start pilot system by the end of next year.

Yoon Sung-kwan, Head of Digital Currency Research Department at the Bank of Korea, said, “We plan to review technical and legal requirements and study to build and test pilot system to prepare for the future changes in payment environment where the need to adopt CBDC is increasing.”

CBDC is a digital currency issued by the central bank. It is similar to cryptocurrency in private sector because it stores data digitally using blockchain or distributed ledger technology. An official from the Bank of Korea said, “We should check the expected legal issue when introducing CBDC.” “We will review the necessity of amendments to related laws, such as Bank of Korea Act, and prepare for specific plans for revision,” he added.

With the prospect that the spread of COVID-19 will be a catalyst for the issuance of CBDC, Bank for International Settlements emphasized that CBDC should have high accessibility and resilience against contagion. The Bank of Korea announced, “Market expansion of private sector is difficult to predict.” “If domestic and foreign situation changes significantly, we must take prompt action,” they added.

Shim Hwa-young(2020.04.06) 현금 사용 뚝… `디지털화폐` 카드 꺼낸 韓銀
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