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Blockchain breakthroughs are driving banks towards digital currencies, the Bank of Korea says

May 19, 2020

The Central Bank of South Korea, The Bank of Korea has carried out new research and analysis on the progress of the central bank’s digital currenciesor CBDC, around the world.

The bank published its “CBDC Progress Report Abroad” on May 18, in which The institution analyzed the CBDC projects of 14 central banks.

New technology is a catalyst for CBDC projects

The bank discovered that recent advances in Payment processing, decentralized distributed ledger technology and a sharp drop in cash usage are the main factors that are causing central banks to research and develop CBDCs.

Blockchain breakthroughs are driving banks towards digital currencies, the Bank of Korea says
Blockchain breakthroughs are driving banks towards digital currencies, the Bank of Korea says

Most of the central banks listed in the report are currently developing information technology systems to test the feasibility of the established CBDC model.

According to the message, The central banks of Sweden, Singapore, Canada, Japan, Thailand and Hong Kong have disclosed the use of distributed ledger technology in their respective CBDC studies. The Bank of Korea said:

“Most central banks are focused on exploring whether forward-looking new technologies can be applied to CBDCs, away from centralized management of distributed registries and account-based transactions that are currently applied to payment systems, and liquidation.”

Small payments versus big payments

Norway, the Central Bank of the Eastern Caribbean, the Bahamas, Sweden, the United Kingdom and China are examining CBDCs for micro payments, while Switzerland, Singapore, Canada, Thailand, Hong Kong and France are concentrating large sums on their efforts to manage CBDCs.

According to the message, Sweden and China have already completed proofs of concept and have reached the experimental stage. while The Bahamas CBDC is in test mode.

The East Caribbean Central Bank, Japan, the European Central Bank, Singapore, Canada, Thailand and Hong Kong continue to investigate the concept. from a CDBC.

Other plans

The Bank of Korea is considering using various distributed registration platformslike Hyperledger Fabric and Coda, in his own CBDC project.

The bank will continue to exchange information with domestic and foreign technology companiesand plans to seek external technical advisors.

Cointelegraph contacted the bank for further details, but received no response until the editorial deadline. This article will be updated when a response is received.