Bank of Korea to Launch CBDC Pilot Involving 100,000 Citizens
The Bank of Korea (BOK) has announced its plans to conduct a pilot program for a central bank digital currency (CBDC) in the fourth quarter of 2024. This pilot will involve the participation of 100,000 Korean citizens. The aim of this initiative is to test the feasibility and effectiveness of issuing and distributing a CBDC.
CBDC Pilot Details
The BOK will collaborate with the Financial Services Commission (FSC) and the Financial Supervisory Service (FSS) to carry out this pilot program. Participants will be limited to using the CBDC for payments only and will not be able to store, exchange, or transfer it to other users.
The pilot program will also explore the integration of the CBDC into a simulation system for carbon emission trading in collaboration with the Korea Exchange. This will assess the feasibility of delivery versus payment transactions between payment tokens and carbon emissions rights.
Three Regions Selected for CBDC Pilot
Earlier this year, the Bank of Korea shortlisted three regions as potential sites for CBDC testing. Jeju, Busan, and Incheon were chosen, while Seoul did not make the cut. Among these regions, Jeju is considered to have the highest chance of becoming the CBDC pilot site due to its population size.
Hot Take: Bank of Korea Takes Steps Towards CBDC Implementation
The Bank of Korea’s decision to launch a CBDC pilot involving 100,000 citizens marks an important milestone in South Korea’s digital currency journey. By conducting this pilot program, the BOK aims to assess the viability and efficiency of a central bank digital currency. Additionally, integrating the CBDC into carbon emission trading simulations demonstrates the potential applications of digital currencies beyond traditional payment systems. As the world continues to explore the possibilities of CBDCs, South Korea is positioning itself as a frontrunner in this emerging field.
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