Bank Of Korea Turns To Private Sector For CBDC Consulting
- The bank has been accelerating the development of its CBDC this year, and is now looking to hire a private firm to help with the architecture of the project.
- While the country remains skeptical about the need of a digital won, it is still planing to have a CBDC pilot up and running by late 2021.
Bank of Korea in Seoul, Korea, on 3 January, 2007. Wikimedia Commons
After completing the first phase of its CBDC’s development, Bank of Korea (BoK) will now be looking for a private company to get involved with phase two, The Korea Times reported on 31 August.
According to the publication, BoK has been accelerating the development of its digital won this year, likely in response to China’s Digital Currency Electronic Payment (DC/EP) system, which is reportedly already in the testing phase. The Korean central bank completed the first review phase of its CBDC project just last month, and is now looking to hire a local company to help it with the second step towards an operational CBDC pilot.
While details of the consulting partnership have still not been made available, the bank has said that the chosen firm will assist BoK with building the architecture of the CBDC, which should detail system aspects such as security systems, handling of data, and possible applications.
An official from the central bank told The Korea Times:
“The BOK will team up with a consulting partner to map out the overall work process and architecture to operate the digital currency system, and both sides will also come up with specific action plans to successfully establish the pilot system on time.”
The bank will soon release the “minimum requirements” that a firm needs to cover before starting their bid to become a participant in the “consultancy” race. It is expected that companies will have around a month to submit their bids, with BoK’s plans to have a pilot up and running sometime in late 2021.
With all that said, the Korean central bank still has no plans to release its CBDC, but is saying that it is only taking specific actions to be prepared for when other national currencies go digital. Even though it remains skeptical, Korea was able to complete the first phase of its CBDC pilot program only in a few months, it being launched at the start of April.
- Korea’s central bank concluded that the CBDC “works normally” under test conditions, but more experiments were needed to confirm its viability in the real world.
- The second phase will focus on cross-border remittance and retail and offline payments, and is expected to finish by June 2022.
Seoul, South Korea – April 10 2019 : Bank of Korea (located in Sejong-daero, Jung-gu, Seoul)
Nabi Rang / Shutterstock
- An official from Bank of Korea has revealed that its CBDC pilot program is on schedule, and that it will begin the final phase of its tests next year.
- While it has made great progress in its research, the bank continues to maintain its position that it has no plans to release the CBDC to the general public.
- The payment system in Korea is very developed, safe and sending money is not that expensive.
- Still, the Bank of Korea will continue to monitor the development of CBDCs amid their concern that such currencies may destabilize commercial banks.