The Bank of Korea announced on April 6 that it has launched a pilot program to assess the logistics of issuing a central bank digital currency (CBDC).
While the South Korean central bank has no immediate plans to introduce such a currency, the pilot scheme will ensure that it is prepared to do so in the face of changing market conditions.
For testing digital WON, the country’s central bank, Bank of Korea has inaugurated a pilot program. The pilot program was undertaken last month expecting to run until December 2021.
On the technical concern of the program, it would ascertain the CBDC design, and operation method of CBDC, and whether blockchain technology may get feasible to implement. While on the legal concern, the program would analyse expected legal issues when introducing CBDC, and accordingly prepare a specific amendment plan for the Bank of Korea Act.
The announcement made clear that the bank does not see an immediate need to release a digital currency in South Korea, rather that, based on other nations’ research in the field, it wishes to be prepared in case such a move becomes a necessity:
“The need to issue a CBDC in the near future still remains slim when considering the demand for cash that still exists, the competitive payment service market and high-level financial inclusion, but there is a need to be able to quickly take steps in case market conditions at home and abroad change rapidly.”