Banca d’Italia and Bank of Korea Sign Agreement on CBDC and IT Systems Collaboration
Summary:
Italy's central bank, Banca d’Italia, announced a memorandum of understanding with South Korea's central bank, the Bank of Korea, addressing IT and payment systems. The agreement primarily focuses on exchanging knowledge related to information and communication technology issues, with a specific emphasis on real-time payment systems and central bank digital currencies (CBDCs). Both nations have been exploring the potentials of CBDCs, with South Korea initiating a pilot program in October involving public and private entities, aiming to test its CBDC with 100,000 citizens by 2024. Despite increasing interest in CBDCs, opposition based on privacy concerns remains significant.
In an official communication issued on December 5, Italy's central bank, Banca d’Italia, revealed a newly established agreement with the Bank of Korea, South Korea's central bank. This memorandum of understanding pertains to information technology and payment systems. Banca d’Italia highlighted that this cooperative agreement aims for an exchange of expertise and knowledge regarding issues related to information and communication technology (ICT), specifically focusing on real-time payment systems and central bank digital currencies (CBDCs).
The general manager of Banca d’Italia, Luigi Federico Signorini, was present at the meeting and sanctioned the pact. In recent times, Italy and South Korea have both been considering the development of CBDCs, albeit through differing methods.
Italy's central bank's primary focus to date has been on ensuring compatibility within its solutions for processing transactions tied to distributed ledger technology (DLT), via hash-linked contracts. This differs from the typical CBDC approach adopted by other European nations. On the other hand, South Korea launched a pilot programme for its CBDC technology in October, involving private and public entities and receiving technological aid via the Bank for International Settlements.
Last month, South Korea proclaimed a proposal to have 100,000 citizens participate in testing its CBDC as of 2024. While many governments are progressing towards the introduction of CBDCs, considerable opposition remains. One notable German politician has expressed detest towards the European Union's digital Euro, arguing that CBDCs are a privacy invasion. Similarly, in the U.S., several influential figures have spoken against a potential U.S. CBDC, with podcast host Joe Rogan making the drastic claim that CBDCs could signify "game over.
Published At
12/5/2023 4:43:22 PM
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