The central bank of South Korea has begun a pilot program to test its national digital currency – WON. The pilot program is scheduled to run till the end of next year to check the technical and legal requirements of CBDC. However, the Bank of Korea believes that it is not necessary to issue CBDC anytime soon.
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The central bank of South Korea has begun a pilot program to test its national digital currency WON. The pilot program is scheduled to run till the end of next year to check the technical and legal requirements of CBDC.
The Bank of Korea, the country’s central bank, has launched a pilot program for testing digital WON in the country that would run till December 2021. The 22-month long program is launched to identify technical and legal provisions required to create and issue a digital currency. However, the central bank of South Korea does not think that there is a demand for CBDC at the moment, and it is not planning to issue digital currency any time soon.
The pilot program will analyze legal and technical requirements for the CBDCs
According to the local news reports, the Bank of Korea launched the pilot project last month and would run till December 2021. The pilot program would define central bank digital currency’s design, an operation method of CBDC, and whether the blockchain technology would be feasible to implement the digital WON. The program would also analyze expected legal concerns when launching CBDC, and accordingly, prepare an amendment plan for the Bank of Korea Act.
The CBDC pilot system construction and testing are scheduled to take place from January 2021 to December 2021.
Central banks across the world accelerate their CBDC research
Central banks across the world are speeding up their CBDC research. China is also expected to launch its centralized digital currency sometime this year. Earlier, the central bank of France also launched an experimental program to test the integration of digital euro in settlement procedures. Several other countries are also experimenting with the central bank-backed digital currency. The central bank of Sweden, the Riksbank, is also running a pilot project to test its centralized digital currency e-Krona.
The Bank of International Settlements (BIS) recently reported that there might be a spur in demand for digital currency like CBCD, as people fear that physical cash is helping the spread of the Coronavirus.
The BIS stated:
“Resilient and accessible central bank operated payment infrastructures could quickly become more prominent, including retail central bank digital currencies (CBDCs).”
Other central banks seem like they want to be ahead of the curve too. The American government now in discussions of three separate Digital dollar bills. French Central Bank has launched a test Digital Euro for inner settlements. Russian Central Bank is testing a few of the government-controlled blockchains. And the ECB head Christine Lagarde is sure that the euro will be on the Blockchain rails soon. Otherwise, she hints, the big banks could lose the magic of printing monopoly.
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