The Bank of Korea completes the first phase of its digital currency pilot

The Bank of Korea has successfully completed the first phase of its mock central bank digital currency (CBDC) tests. Launched August 2021.

This was announced by the South Korean central bank The first phase of the CBDC mock test was completed in December, while the second phase is currently underway, YNA News reported. The first phase of the mock test covered some of the sovereign digital currency’s basic functions, such as distribution and issuance.

The second phase of the central bank’s digital currency pilot will test real-world functionalities such as cross-border remittances, bulk payments and offline payments.. The bank explained:

“In the second phase of the test, we will confirm the possibility of operating various functions, such as offline billing, and the application of new technologies, such as strengthening data protection.”

The Bank of Korea completes the first phase of its digital currency pilot
The Bank of Korea completes the first phase of its digital currency pilot

The Bank of Korea (BOK) also wants to involve financial institutions in the second phase, similar to what China is doing with its digital yuan. But unlike China The digital currency issued by the BOK would also focus on user privacy.

The second phase is expected to end in June 2022, after which the central bank plans to draw up official launch and marketing plans.

South Korea is among the select group of nations that have started or completed the pilot phase of their CBDC tests. According to the Atlantic Council currently 91 nations are working on their sovereign digital currency and only 14 have reached the pilot phase.

Monitoring the development of CBDC in the world Source: Atlantic Council

South Korea has emerged as one of the leading countries in the cryptocurrency space in recent years and recently announced its plans to become a global leader in the Metaverse as well. Though China is currently ahead of the CBDC game, many European and Asian peers have accelerated their development plans to catch up..

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