South Korea Invites 100K Citizens to Test CBDC

The central bank of South Korea, the Bank of Korea (BOK), has announced that as part of its central bank digital currency (CBDC) pilot, it will allow 100,000 citizens of the country to make purchases with deposit tokens.

The three-month testing period is scheduled to begin "around September to October" of 2024.

A report published in the Korea Times on November 23 states that users will only be able to use the CBDC for payment purposes; they will not be able to keep, exchange, or send it to other users.

The objective of the pilot stage is to evaluate the viability and efficiency of creating and dispersing the currency.

To assess the viability of delivery versus payment transactions, the BOK and the Korea Exchange will also work together to incorporate the new digital currency into a simulation system for trading carbon emissions.

The newspaper quoted a BOK statement that stated:

“[...] The pilot project will be conducted first in the fourth quarter of 2024. The possibility of conducting separate pilots will be considered as well if banks propose new individual projects.”

Agustin Carstens, general manager of the Bank for International Settlements (BIS), visited Seoul, the nation's capital, at the same time as the BOK's statements. Carstens has called the Korean CBDC project "the digital win" in public.

In October, the Bank of Korea declared that the CBDC pilot program would begin. Private banks and governmental organizations will participate in the pilot, which will test retail and wholesale CBDCs, and the BIS will offer professional technical assistance.

The BIS leads the globe in CBDC adoption. It is supporting the creation of a cooperative platform with the central banks of China, Hong Kong, Thailand, and the United Arab Emirates in addition to helping the Swiss National Bank establish a wholesale CBDC.

Among many other projects, it is also working with the European Central Bank to develop a proof-of-concept for a transactions tracker.

Sources:

https://cointelegraph.com/news/south-korea-invite-100-000-citizens-test-cbdc-2024

https://www.koreatimes.co.kr/www/nation/2023/11/602_363810.html