South Korea’s central bank to begin testing its CBDC in 2021.

The central bank of South Korea will begin testing a digital currency next year, becoming the latest global central bank to set out a timeline for exploring CBDCs.

According to the Yonhap report, the Bank of Korea will begin pilot transactions in 2021 to determine the feasibility of rolling out a digital currency system across Korea. According to the report, the central bank of Korea has already completed work on designing the digital currency, pending real-world transaction testing. The bank said that the testing would allow the bank to decide whether the digital currency worked in a “restricted environment.” 

 

“The CBDC test system can be seen as the process of actually circulating cash.” 

According to the proposed CBDC system, the Bank of Korea would be responsible for issuing the digital won, while its distribution would be overseen by the country’s private banks and financial institutions. Test transactions are to be managed by the bank on a blockchain network. The central bank said testing the digital currency would involve making transactions to circulate cash. “The central bank digital currency test system can be seen as the process of actually circulating cash,” the central bank stated. With the national digital currency now reportedly designed and ready for the testing phase, the bank may well be prepared with a sooner launch date in mind.

 

Central banks continue to explore CBDCs. 

As reported earlier, the Bank of Japan had revealed that it would start experimenting with a central bank-backed digital currency starting next year. Central banks in most countries have expressed interest in CBDCs, and many of them are working actively on the same. The People’s Bank of China is all set to become the first major nation to launch its national digital currency. PBoC has been working on its national digital currency, dubbed DCEP, for the last five to six years and is now very close to issuing it to the general public.

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Jai Pratap
Jai Pratap
A Mass Media Graduate who loves to write. Jai is also a sports enthusiast and a big movie buff. He loves to learn new things.

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