- The media said South Korea’s CBDC pilot has reached a new stage.
- The central bank has selected three cities, one of which will host a “field test”.
- The digital currency will be distributed in the same way as alternative local means of payment.
The Bank of Korea has selected three regions, one of which will host a pilot of the central bank’s digital currency (CBDC) project. This was reported by IT Chosun citing its sources.
The regulator has selected the following cities – Jeju, Busan and Incheon. At the same time, the central bank is inclined to choose the former, said the interlocutor of the publication. Busan has too many people living in the city, which will put a high strain on the payment infrastructure, he added.
According to the publication, not only locals but also tourists will have access to the CBDC. But when exactly that will happen is still unknown. The launch of the pilot involves many technical limitations and also requires hiring additional staff, the resource’s interlocutor emphasized.
Central Bank is likely to take advantage of a scheme to distribute local currencies. These are alternative means of payment, which have been issued in some regions of the country since 2019.
In particular, such money is in circulation in the aforementioned cities. They are called “tamranjeong,” “tonbaekjeong” and “incheon e-im,” respectively.
The goal of the alternative currency project was to support financial flows, encourage social groups and “digitize” the economy at the micro level, notes The Economics Review.
South Korea and CBDC
The country began testing a digital currency in 2022. In November, the regulator reported the completion of this phase. The project was recognized as promising and viable.
In May 2023, Samsung joined the initiative. With its participation, the parties tested whether CBDCs could be paid for offline purchases using an NFC module. In early July 2023, we covered the Bank for International Settlements (BIS) forecast. According to it, by as early as 2030, there will be around 24 active digital currencies in the world.
According to it, there will be around 24 active digital currencies in the world.