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South Korea’s Central Bank to speed up CBDC project

This decision appears to be a response to the increase in interest in CBDCs around the world and the rapid growth of the cryptocurrency sector.

Date: 2024-04-17 Author: Marek Stiller
South Korea’s Central Bank to speed up CBDC project

South Korea’s Central Bank is set to accelerate its CBDC project and will pilot its digital CBDC with a group of 100,000 citizens later this year.

According to Newsway, the Bank of Korea (BOK) will test the usability of digital CBDCs and deposit functions with the group “by the end of 2024.”

The Central Bank of South Korea plans a pilot in the last quarter of 2024

Last October, the BOK announced plans to conduct “CBDC usability tests” in conjunction with the country’s top regulators, the Financial Services Commission and the Financial Supervisory Service.

Lawmakers also created a law that distinguishes CBDCs from cryptocurrencies such as Bitcoin (BTC). The bank revealed plans to “build a pilot CBDC network.” The network will issue and distribute three types of tokens based on institutional CBDC models.

The bank added that it will conduct real-time transaction tests with ordinary citizens. It wants test subjects to pilot the use of CBDCs in commercial settings. However, many critics say the launch of CBDC in South Korea could hurt the country’s burgeoning fintech and banking sector.

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Seo Ji-yong, professor of business administration at Sangmyung University, said it will take some time to commercialize CBDC in South Korea. Seo added that as the CBDC project becomes more concrete, there is a possibility that private companies will prepare suitable projects.

The professor continued:

“The digital CBDC is still in the pilot phase. So we have to wait and see how [the private sector] will react.”

Retailers the winners of CBDC’s debut?

Similar sentiments have been expressed in other countries that are currently accelerating their CBDC projects. In Russia, financial analysts say the domestic retail sector would likely be the only significant winner.

Analysts believe the banking sector could lose $536 million a year if the digital ruble is adopted. However, a BOK official assured the private sector that it does not intend to encroach on its business sectors. “Instead of creating risks for other existing industries, the commercialization of CBDC will provide new innovative services. It could represent an opportunity for industry development.”

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Marek Stiller
Marek Stiller
Founder of the "Cryptocurrency for Beginners" channel on YouTube. He collaborates with Łukasz to form the Arena Trading group, while at the same time being passionate about blockchain technology. His knowledge and experience in the cryptocurrency industry help beginner investors better understand this dynamic market.
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