CBDC digital currency is a primary concern of many central banks across the world.
And South Korea is no exception, as the Korean Central Bank looks to proceed with the creation and application of the central bank’s digital currency, “CBDC”, at a slow but steady and sure pace.
According to information disclosed by the “Korea Herald” on Monday, the Bank of Korea is working to implement a virtual environment that would allow evaluation, monitoring and testing of the various stages necessary to digitize its paper currency.
Korea wants CBDC digital currency, but without rushing:
The Central Bank of Korea plans to divide its research into two parts:
The first is mainly theoretical, as they study the best features of central bank currencies, their compatibility with the current legal system, and the problems they could raise, such as data protection, offline transactions and so on.
While the second more practical phase involves real-time testing of international transactions and cross-border payments.
Looking at the news, we find that it brings Korea closer to the world of digitizing money, but the authorities there still confirm their caution.
The first phase will start in August of this year.
However, since it is just an exploration, it does not guarantee even future implementation.
The central bank has yet to reveal plans to launch the CBDC in the near future.
This research is expected to reach its peak in December.
If all goes well, the second phase is slated to start a year later, that is, in June 2022.
An official from the Bank of Korea told the Korea Herald:
Korea could start using a central bank digital currency if it proves to be better than cash if physical monetary transactions decline.
We are launching a beta to see how a central bank’s digital currency can be used as a form of safe-haven asset when the share of cash transactions drops dramatically.
According to the Bank of Korea, the Korean government has agreed to allocate a budget of 4.9 billion won ($ 4.4 million) to implement the project.
This would put Korea in competition to become the first developed country to launch its digital currency for central banks.
China is the most developed country, and it has already distributed several million digital yuan, with real-time testing in several regions.
The United States is also studying the feasibility of the digital dollar, and many countries in Europe have been very enthusiastic about the idea of a central bank digital currency.
For example, France has already entered into agreements with the “Tezos” project to use its blockchain network as a CBDC infrastructure and banks are already using Tezos to issue security digital currencies.