Introduction

The Bank of Korea (BOK) launches a pilot project in cooperation with The Financial Services Commission (FSC) and the Financial Supervision Service (FSS) to explore the implementation of a central bank digital currency (CBDC).

Primary Goal of the Pilot Program

The primary goal of this pilot program aims to evaluate the practical aspects of a Wholesale CBDC network in cooperation with commercial banks and the public.

Avoiding Bank Disintermediation

Instead of offering CBDC for retail sale, the central bank will focus on researching the currency technology while the government looks for creative ways to get people interested in digital currencies.

“Koreans are widely known for their active share in encryption trading. Moreover, there is active interest and large investments in the field of blockchain technology from both large companies and start-ups.”

– The Bank of Korea

Boosting Payment System Efficiency

With central bank currencies for wholesale central banks, the regulator seeks new ways to boost payment system efficiency. As part of the pilot, BOK will also create a business group to reduce legal uncertainty.

Testing Central Bank Digital Currencies

Although it is said that the public will have the opportunity to test central bank digital currencies by the end of 2024, the Bank of Korea did not provide a timeline for the pilot.