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South Korean Central Bank Will Start CBDC Payment Pilot With 100K Citizens Next Year

South Korean Central Bank Will Start CBDC Payment Pilot With 100K Citizens Next Year
South Korean Central Bank Will Start CBDC Payment Pilot With 100K Citizens Next Year

The central bank of South Korea, the Bank of Korea (BOK), has announced plans to invite 100,000 Korean citizens to take part in a pilot program for its central bank digital currency (CBDC). The primary objective of this initiative is to assess the viability and effectiveness of the CBDC in real-world payment scenarios. The testing phase is scheduled to commence between September and October of 2024 and will span a duration of three months.

According to the Korea Times, participants selected for the pilot program will be restricted to utilizing the CBDC exclusively for making payments, without the option to store, exchange, or transfer it to other users. The BOK aims to evaluate the issuance and distribution aspects of the digital currency during this phase.

Moreover, the BOK has announced plans to collaborate with the Korea Exchange in order to integrate the CBDC into a simulation system designed for carbon emissions trading. This collaboration will enable the central bank to assess the feasibility of delivery versus payment transactions within the context of the digital currency.

While the BOK has expressed its willingness to consider separate pilot projects proposed by banks, the central bank's main focus is to garner valuable insights from this pilot program, which will subsequently inform the future development and implementation of the CBDC.

In October, the BOK had initially unveiled its plans for the CBDC pilot, which will involve the participation of private banks, public institutions, and technical support from the BIS. The BIS has been actively engaged in multiple global CBDC initiatives, collaborating with central banks worldwide to explore and develop digital currencies.

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