The central bank said it is already in talks with commercial banks that will select merchants willing to accept payments in government-issued stablecoins. Although CBDC testing will be geographically limited to three cities, non-residents will be allowed to use the digital won at certain retail outlets. A spokesperson for the bank involved in the pilot program explained that the e-wallet for digital won will be available not only to locals but also to tourists.
Supermarkets and restaurants will be participants in the pilot program, with users joining gradually. The Bank of Korea clarified: at the beginning of the test, it may choose one of the three listed cities with the smallest number of residents to reduce the burden on the central bank. Therefore, the capital city of Seoul will not participate in the CBDC experiments.
The Bank of Korea has assured that it will take a cautious approach in implementing the digital won to reduce the possible adverse impact on the country’s monetary policy. Before the CBDC s full launch, the regulator intends to consult with the general public.
The Central Bank says that a year ago, the results of a preliminary test of the digital won left much to be desired due to serious competition with local micropayment services. Another challenge the central bank needs to address is finding more IT talent for a large-scale deployment of CBDC in retail.
In 2022, the Bank of Korea discovered a performance problem with the digital won blockchain: at peak load, there were real-time transaction processing outages.