The Bank of Korea (BOK) said Monday it has successfully completed its first phase of a two-step mock test of the feasibility of a central bank digital currency (CBDC) as it is reviewing whether to introduce the potential new form of money. The central bank launched the first phase in August last year and completed the experiment in December.
CBDC showed normal operations in a cloud-based environment.
The Bank of Korea had noted that they observed that CBDC showed normal operations in a cloud-based environment. “We will confirm the possibility of operating various functions, such as offline settlements, and the application of new technologies, such as one intended to strengthen privacy protection during the second phase of the test,” the central bank of Korea said in a press release. The second phase of the test will be carried out until June 22, the BOK noted.
Global central banks have been speeding up their research on CBDCs.
Global central banks have been speeding up their research on digital currencies to brace for a fall in demand for cash and the emergence of cryptocurrencies in the private sector. Central banks in some Latin American countries and African countries have started to issue CBDCs. China has been pushing to issue a CBDC this year, possibly making itself the first major economy using the new form of currency, while the U.S. Federal Reserve reportedly launched a review of its potential benefits. As reported earlier, the monetary authority of Iran intends to pilot its central bank digital currency (CBDC) in the near future, a high-ranking representative of the financial regulator said, quoted by the Iranian Labour News Agency (ILNA). The news comes in the fourth year since the project’s initial announcement.