South Korea’s central bank is progressing with its central bank digital currency (CBDC) plans, and is now looking for a partner to design its pilot platform, Reuters reported on 24 May.
According to the publication, the Bank of Korea (BoK) has opened up the bidding process to choose a technology supplier to develop its digital won pilot platform and research the practicalities of launching a CBDC in a test environment. A BoK official told Reuters the move was in response to fast changes in the global financial system, and that:
“The share of cash transactions are decreasing significantly. The steps we are taking now are to prepare for the changes in the payment settlement system, changing rapidly.”
The BoK plans to run the pilot program for several months this year, from August to December, and potentially expand the pilot into a second phase next year. The pilot CBDC platform will be designed to have simulations for commercial banks and retail outlets, fund transfers, deposits, as well as mobile phones test payments.
According to a survey from the Bank for International Settlements (BIS) from January, one fifth of the central banks around the globe are likely to release some kind of a CBDC in the next three years. The survey of 65 central banks also showed that 86% were already exploring the benefits and drawbacks of digital currencies, with some testing possible designs.
The BoK is not the only South Korean bank to work on a CBDC project. Back in March, Shinhan Bank revealed a new blockchain-based pilot platform for testing CBDC, developed in partnership with the IT arm of LG Corporation, LG CNS. At the time, Shinhan reportedly said it was ready to collaborate with the BoK on developing a potential digital won.