Bank of Korea completes first phase of digital currency pilot
The Bank of Korea (BOK) has successfully completed the first phase of its central bank digital currency mock testing started in August 2021.
The South Korean central bank said that the first phase of its CBDC mock testing was completed in December, and the second phase is underway now. The first phase of the test involved some of the basic functions of the digital currency such as distribution and issuance.
The second phase of the CBDC pilot would test real-world functionalities such as cross-border remittance, retail payments and offline payments. The bank stated:
“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.”
BOK is also looking to onboard financial institutions for the second phase, quite similar to what China is currently doing with its digital yuan. However, unlike China, BOK-issued digital currency would also focus on user privacy.
The second phase is expected to complete by June 2022, after which the central bank plans to chalk out an official launch and commercialization plans.
South Korea has thus joined the group of nations that have either started or completed the pilot phase of their CBDC testing.
South Korea has become one of the leading crypto-compliant nations over the past few years and recently revealed its plans to become a world leader in the metaverse as well.