The central bank of Korea (BOK) is moving to the next preparatory stage for a potential digital WON, a central bank-issued digital currency (CBDC). Recently, the central bank began reviewing the legal and technical feasibility of issuing national digital currency, just in case the need arises. However, the bank now plans to debut a pilot program to trial the issuance and circulation of the potential national digital currency.
Korea CBDC gets a boost
As Korea Herald reported on Wednesday, the central bank disclosed its plans to start a pilot program by next year on the possible introduction of the national digital currency. The pilot program is basically aimed at test-running the issuance and circulation of the digital currency. According to officials from the central bank, the planned pilot program will be conducted in a similar approach used for the banknotes.
Basically, the central bank will be responsible for the issuance and retrieving the digital currency from circulation. Whereas, other financial institutions in the country will oversee the circulation of the digital currency to the public. However, this doesn’t mean that BOK is preparing for the actual launch of the national digital currency. The move today is only purported to keep the BOK ready, just in case the need arises.
Central banks continue to race for CBDCs
The bank of Korea made a similar statement when it announced its plans to analyze the legal and technical requirements of a potential digital WON. At the time, the central bank disclosed that it isn’t ready to issue any digital currency soon, adding that, there wasn’t any demand for it in the country. The chances for a Korean CBDC keeps increasing as the central bank continuously advances its pilot programs for it.
Aside from Korea, many central banks are currently working towards the issuance of national digital currency. This comes as the public is increasingly turning to digital payment methods to process transactions, as the ECB recently noted. Meanwhile, PBOC is already pushing the development of the Digital Yuan to a greater extent, as more than $160 million was recently processed using the planned Chinese CBDC.