Bank of Korea Delays CBDC Issuance
Bank of Korea Governor Rhee Chang-yong expressed that it would not be in South Korea’s best interest to launch a CBDC before the United States and European countries. Therefore, the CBDC issuance will be delayed despite extensive research efforts by the central bank.
Additionally, the Bank of Korea, Financial Services Commission, and Financial Supervisory Service announced that a pilot test plan will allow people to test CBDCs using vouchers.
In the fourth quarter of 2024, 100,000 people will be able to test CBDC using public vouchers. Currently, state and local governments issue public vouchers for subsidies, and banks will issue certificate of deposit (CD) tokens as digital vouchers.
A CBDC is a new form of digital currency issued by a central bank, serving as digital payment for institutions and individuals.
Rising Crypto Regulatory Environment
The Bank of Korea and Korea Exchange plan to simulate the use of CBDC for carbon credit trading on a distributed ledger. The test also includes the issuance of tokenized assets and settlements through security tokens.
South Korea’s crypto landscape has been growing after the government introduced a regulatory framework. Despite some tightening after the Terra-LUNA crisis in 2022, the government remains supportive of the country’s crypto landscape.
Hot Take: South Korea Takes Cautious Stance on CBDC
South Korea’s decision to delay CBDC issuance in favor of waiting for US and European action shows a cautious approach and highlights the complexities of navigating the evolving cryptocurrency landscape. The country’s commitment to pilot testing CBDC with vouchers further shows a strategic and careful approach to this emerging financial technology.
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