The Central Bank of South Korea says the Central Bank Digital Currency (CBDC) pilot program will involve using deposit tokens to purchase products by 100,000 Korean citizens, The testing will start “around September to October” of 2024 and last for three months.
Participants will only be able to use the CBDC for payment purposes, with no option to retain, exchange, or transmit it to other users, according to a Korea Times article from November 23. The objective of the pilot phase is to assess the efficacy and viability of currency distribution and issuance.
To test the viability of delivery versus payment transactions, the BOK will also collaborate with the Korea Exchange to integrate its new digital currency into a simulation system for carbon emissions trading. As cited in the newspaper, the BOK release 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, the Bank for International Settlements (BIS) general manager, visited Korea’s capital city concurrently with the BOK’s statements. Carstens has referred to the Korean CBDC initiative in the public sphere as the digital won.
In October, the Bank of Korea declared the commencement of the CBDC pilot program. Private and public institutions will participate in the pilot to evaluate wholesale and retail CBDCs; the BIS will provide expert technical support.
The BIS is a leader in the worldwide implementation of the CBDC. It is also assisting the Swiss National Bank in the development of a wholesale CBDC and the central monetary authorities of China, Hong Kong, Thailand, and the United Arab Emirates in the construction of a joint platform.
Aside from numerous other initiatives, it is also developing a proof-of-concept for a transactions tracker in collaboration with the European Central Bank.
