The Central Bank of South Korea announced a CBDC pilot program in a statement on Monday, April 6.
As part of a radical, forward-looking move to actively research and develop digital versions of the country's national currencies, South Korea announced that it launched a Central Bank Digital Currency (CBDC) test last month.
Scheduled to run for 22 months, the decision was triggered by steps taken by countries such as the United States and Japan to issue CBDCs. However, the United States and Japan had no plans to create a CBDC in the near future, but until the last few weeks they have recently changed their position to promote research in this emerging field.
The spread of the COVID-19 pandemic has prompted a change in attitude on their part. Any means of containing the crisis seems justified at the present time. Basically, this experiment with a digital won is intended to identify the technical and legal provisions necessary for the creation and issuance of such a monetary tool.
A Pilot Project?
South Korea's new attitude has prompted the country's central bank to launch a nearly two-year plan to develop a CBDC and to examine its viability as a substitute for the traditional form of money, paper money. The plan began in March of this year and will be completed by the end of 2021.
The project is being developed by a special department of BOK created in February. However, the preliminary date for the introduction of digital currency by the South Korean central bank is not yet known. BOK has stated that the introduction will not take place in the short to medium term. As in other trials elsewhere in the world, the focus is of course on its feasibility. The question of technical support is at the heart of the project with the blockchain in focus. As far as the legal aspect is concerned, the sensitive question will be to observe the consequences of using a CBDC to provide a legal framework for its officialization.
Written by Laetitia: Project Manager