South Korea is ready to test its CBDC with commercial banks, but says the launch is “long”
central south korea Bank of Korea (BOK) says it’s now ready to begin “real-world” testing for its digital gain prototype – but declines to say whether or not it intends to roll out the token.
Aju Kyungjae reported that 10 domestic commercial banks have already announced their intention to participate in the next stage of the BOK’s Central Bank Digital Currency (CBDC) pilot project. Since late last year, the BOK has conducted closed-door tests with private sector companies, including affiliates of the internet giant. Kakao.
But the BOK said in the “second half” it wants “large domestic commercial banks” to join the testing process.
This next part of the multi-stage pilot, the bank said, will focus on remittances and payments in real “financial services environments.” So the BOK has sent a letter asking for help to most of the country’s banks. Among the 10 who have already signaled their desire to work with the BOK are banking giants Shinhan Bank and Nonghyup Bank (NH).
The BOK also updated banks on its digital progress in KRW late last month.
The central bank wants to know if its KRW digital prototype is compatible with various banks’ IT platforms and wants to investigate any issues with interoperability.
The BOK will then continue this (final) testing stage with a full report that it wishes to share with foreign “central banks and international financial organizations”.
However, the report notes, the BOK still considers that it should take a “cautious attitude” towards issuing digital tokens. And even if the digital won proves to be usable, “it is expected to take considerable time before it is actually introduced,” according to the report.
He added that “social consensus” on a digital currency rollout would be needed before launch, while the BOK also wants time to “ensure” the “technical stability” of its token against cyberattacks. Security-related issues, he added, are “not problems that can be solved in a short time either”.
Aju Kyungjae quoted a BOK spokesperson as saying:
“Even if we complete our research on a CBDC, it will take a long time [for us to] actually run it.
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