South Korea to Launch CBDC Pilot with 100,000 Participants in 2024
South Korea’s central bank, the Bank of Korea (BOK), is gearing up for a significant step in its exploration of a central bank digital currency (CBDC). The BOK announced plans to invite 100,000 Korean citizens to participate in a CBDC pilot, scheduled to commence in the fourth quarter of 2024.
During this three-month pilot phase, participants will exclusively utilize the CBDC for payments, with restrictions on storing, exchanging, or sending it to others. The primary objective is to assess the feasibility and effectiveness of issuing and distributing the digital currency.
The BOK, in collaboration with the Korea Exchange, aims to integrate the CBDC into a simulation system for carbon emissions trading, testing the viability of delivery versus payment transactions. The pilot will also explore the potential integration of CBDCs with a carbon trading platform.
The move follows the Bank of Korea’s announcement in October regarding the launch of the CBDC pilot, encompassing retail and wholesale CBDCs. Private banks and public institutions will participate in the trial, with expert technical support provided by the Bank for International Settlements (BIS).
Agustín Carstens, General Manager of the BIS, recently visited Seoul, referring to the Korean CBDC project as the “digital won.” The BIS is actively involved in various global CBDC initiatives, including collaborations with the Swiss National Bank, the European Central Bank, and central monetary authorities in China, Hong Kong, Thailand, and the United Arab Emirates.
South Korea’s move towards a CBDC aligns with global trends, as numerous countries, including Japan, India, and Hong Kong, explore and pilot digital currency systems. The pilot program represents a crucial phase in South Korea’s journey towards embracing digital currencies and modernizing its financial landscape.