Three locations remain as potential test beds for the Bank of Korea’s (BOK) central bank digital currency (CBDC). Notably absent is the capital city of Seoul.
IT Chosun claims that Jeju, Busan, and Incheon are the three most likely contenders.
The bank will pick one of the three options at some point. It will subsequently begin public payment and distribution trials after securing franchises that are able to take CBDC payments.
The confidential exam is set for the next year. The anticipated number of users and the effect on the local economy will be taken into account by the BOK when deciding on the pilot location.
A commercial bank official stated,
“The Bank of Korea is burdened in many ways due to the large number of eligible citizens in the case of Busan, so the opinion was greatly inclined to Jeju, which has the next largest population.”
The bank representative emphasized that tourists and locals alike will be able to use the CBDC electronic wallet software.
“We are in touch with distribution companies like big-box supermarkets,” they stated.
The BOK has assured us that “the customer test is being well prepared without interruption.”
Numerous Individuals and Organizations in Transition
According to the report, the CBDC trials will be implemented similarly to how local currencies are issued and distributed in South Korea.
Governments only issue and authorize their own currency for use within their own borders.
Tamnaneunjeon (run by Jeju Bank), Dongbaekjeon (run by Busan Bank), and Incheon e-Eum (run by a partnership of Kona I and Nonghyup Bank) are the local currencies now in circulation on the islands of Jeju, Busan, and Incheon.
In contrast to these alternate currencies, the research indicated that CBDC still faces numerous significant technical challenges.
However, it was reported that an official in the IT sector said that,
“The Bank of Korea is in urgent need of a significant number of IT specialists because it is about to embark on a massive retail payment system project. big firms, together with a big number of its employees, are in the process of restructuring.”
Based on the outcomes of the evaluation, the BOK is likely to gradually broaden the scope of eligible topics.
Tokenized deposits and the CBDC pilot are only two examples of how KEB Hana Bank and the BOK want to collaborate.
The BOK has been collaborating with a variety of commercial banking partners on the CBDC, while Hana has been funding research into the cryptocurrency industry.
The initiative, on which the central bank has been working since at least 2020, has completed its first phase and is now in its second.