South Korea, through its apex bank, the Bank of Korea (BOK) – has revealed its plans to begin testing its central bank digital currency (CBDC) in 2024. A local news outlet, the Korea Times, confirmed the report, saying that the testing will begin either by September or October running for three months.

The report also claimed that South Korea would allow 100,000 citizens to participate in the pilot process. However, they may not store, exchange, or send the CBDC during this period. That is, participants may only use the CBDC to settle payments.

 

BOK Aims to Gather Information from Testing

 

The Bank of Korea will be looking to use the pilot stage of its CBDC to determine things such as acceptability and ease of use. It will also seek to determine the effectiveness of issuing and distributing the digital currency, among other things.

To easily achieve some of these goals, the BOK has said it will partner with the Korea Exchange to integrate its CBDC into a simulation system for carbon emissions trading. According to the Korea Times, that is to test the feasibility of delivery versus payment transactions.

It will also work hand in hand with several private banks and public institutions, while also tapping the Bank for International Settlements (BIS) to provide expert technical support.

 

Part of the BOK’s statement, as quoted by the local newspaper, reads:

“The pilot project will be conducted first in the fourth quarter of 2024. The possibility of conducting separate pilots will be considered as well if banks propose new individual projects.”

 

Efforts in Top Gear

 

From all indications, the BOK is leaving nothing to chance with its CBDC plans. Its commitment is once again revealed by its partnership with the BIS, which has been at the forefront of global CBDC adoption. Like South Korea, the Swiss National Bank also sought the help of the BIS to develop a wholesale CBDC. However, the BIS is doing more for the Swiss Bank than just developing a CBDC. It is also helping the institution to build a joint platform with the central monetary authorities of China, Hong Kong, Thailand and the United Arab Emirates.

 

Even the European Central Bank (ECB) is not left out. The BIS is currently developing a proof-of-concept for a transactions tracker with the ECB, among many other projects. In closely related news, Agustin Carstens, general manager of the BIS, was also recently spotted in South Korea’s capital city, Seoul.