Towards launching South Korea CBDC, the country’s central government has started a pilot program to observe, analyze, and check both technical and legal requirements. The test will continue until the end of 2021.
The country’s central bank, however, believes it is not yet time for the launch of South Korea’s CBDC as there are no demands for the currency just yet, and the bank also is not ready to issue it anytime soon. Reportedly, the pilot project started in March.
This would also explain South Korea’s CBDC design, operation method, and the need for blockchain technology to implement the digital WON. It would also analyze possible legal problems when the currency sets to fully launch at the same time, plan an amendment for the bank.
The CBDC pilot system construction and testing are scheduled to take place from January 2021 to December 2021.
Outside South Korea CBDC, other countries press harder on CBDC research
Apart from South Korea’s CBDC processing, other countries’ central banks also are intensifying research towards getting their digital currency running. China, for example, who has been leading in matters relating to CBDC, is also expected to launch its digital currency before the end of the year.
The central bank of France also before now launched an experimental program to see how well digital euro would integrate into settlement procedures in the country. Likewise, Sweden’s central bank is currently running a test on its centralized digital currency e-Krona.
Several other countries also are working towards getting their CBDC, and others are proposing to have one doing research and seeing how feasible a CBDC is for them. Earlier this year, the European Central Bank began researching on benefits of euro CBDC if launched. Also, there were reports of a lawmaker in Japan recommending a CBDC draft.
Implications of the South Korea CBDC
The South Korea CBDC might be the needed infusion and mitigation for the country’s relentless fight against the COVID 19 pandemic. South Korea had tested over 295,000 people for the coronavirus, reporting over 8,500 infections with 81 deaths. In total, the country has tested over 5,000 people per million citizens, which represents the highest testing rate in the world.
Payments and other transactions can be facilitated without the risk of contamination from cash bills. CBDCs exhibits properties similar to physical currencies but can allow for instantaneous transactions and borderless transfer-of-ownership. This is ideal for lockdowns and quarantines anywhere in the world where movements are restricted and most banking facilities are closed.