South Korea's Central Bank Spotlights Digital Currency with New Pilot Project
Summary:
South Korea's central bank, the Bank of Korea (BOK), in collaboration with the Financial Services Commission and the Financial Supervisory Service, announces a pilot project to study the technical groundwork needed for a potential Central Bank Digital Currency (CBDC). The project, involving public and private banks, will evaluate the viability of a monetary system predicated on wholesale CBDCs. Retail and wholesale CBDC tests, starting Q4 2024, will be overseen by Bank for International Settlements.
Adding to the list of nations delving into central bank digital currencies (CBDCs), South Korea plans to embark on its own research endeavor. The pilot project, initiated by the Bank of Korea (BOK), will investigate the necessary technical foundation for a future digital monetary system. This joint initiative involving the BOK, the Financial Services Commission (FSC), and the Financial Supervisory Service (FSS) was publicized on Oct. 4. The project aims to evaluate the feasibility of a monetary setup based on "wholesale CBDCs". The pilot will encompass private and public institutions with the Bank for International Settlements (BIS) offering technological know-how. Retail and wholesale variants of CBDC will be tested by BOK. Within the latter's trial framework, banks will digitize their deposits and circulate them within a network overseen by BOK, FSC, and FSS. Testing for the retail CBDC is slated to commence immediately after Q4 2024 system establishment. Related: 70% of South Korea's reported overseas assets are now in Crypto. However, BOK highlights that CBDC experimentation does not necessarily translate into concrete implementation. Yet, FSS's First Deputy Governor, Lee Myung-soon, views the pilot as a stride towards an evolved monetary system. Mirroring these views, Denis Beau, France's Central Bank's first deputy governor, in a speech on Sept. 3, hailed the CBDC as a spark for augmenting cross-border payments and shaping a novel international monetary system.
Published At
10/4/2023 9:48:33 AM
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