The Central Bank of South Korea announced in April that it was testing its own digital currency, and that it will move into the distribution phase in 2021. The South Korean digital currency distribution phase is the 3rd and final phase, according to the 22-month pilot program announced in April.
In the news shared at the Korea Herald, it is stated that the Central Bank of South Korea has moved to the second stage of the digital currency pilot program, which consists of 3 stages. At this stage, which includes the analysis of the process and the search for consultancy, the Central Bank of South Korea accelerated its work. Completing the first stage in July under the name of design and control, the time foreseen for the bank to reach the distribution and circulation level was 2021. During the distribution and circulation phase of the pilot program, South Korea will distribute its own digital currency and enable the circulation of relevant financial institutions.
With the impact of the coronavirus pandemic, global people started to use contactless and cashless payment systems more, causing many central banks, including South Korea, to raise the issue of CBDC and accelerate the studies. Stating that blockchain technology will be used for digital currency tracking, the bank underlined that the pilot program will not reveal a real digital currency. The digital currency to be tested will only be used for trial purposes.
South Korea Fairly Moderate on CBDC
The digital currency (CBDC) attitude and work of the Central Bank of South Korea remains much more cautious compared to global central banks such as the Bank of China. While the Bank of China has already started to use its digital currency in various fields such as transportation and public services, South Korea has not yet completed the research phase.
The Bank of China has announced that it has transferred $ 162 million worth of its digital currency “digital yuan”. In recent weeks, it started digital yuan tests in major cities such as China, Shenzhen and Xiongan. China wants to steer the development of the country’s economy by keeping CBDCs under control.