South Korean subsidiaries of Naver and Kakao are reported to have submitted proposals to run the 10-month blockchain pilot program, which will aim to test the feasibility of a central bank digital currency in a simulation. South Korea’s central bank has received bids from Kakao’s blockchain subsidiary Ground X and the Naver-affiliated Line Plus. Bank of Korea is now narrowing down the field, with imminent plans to select the winning bid to run the pilot scheme.
The CBDC pilot is expected to run until June 2022.
The digital currency pilot is expected to run until June 2022, with a budget of 4.96 billion won ($4.3 million). The pilot program will test the CBDC, dubbed the digital won, in a virtual environment powered by distributed ledger tech. The bank will use the pilot scheme to explore different applications of the CBDC, including issuance, redemption, electronic payments, settlement, and rights management for digital media and copyright. The central bank of Korea first launched its bidding process for the contract back in May, seeking a tech partner to help explore the benefits and implications of a CBDC launch.
Central banks continue to explore CBDCs.
Earlier, the International Monetary Fund (IMF), the World Bank, and the Bank of International Settlements (BIS) in a joint report proposed to the G20 that a cross-border network of central bank digital currencies (CBDCs), underpinned by efficient technological integration and proactive international cooperation, could be of significant benefit to the world economy. Major central banks across countries are actively exploring digital currencies’ options. Countries including UAE, USA, Canada, Russia, and China, are working on their CBDCs.