South Korea’s monetary policy regulator is taking steps to create its own digital coin. Bank of Korea is now looking for a technology provider to develop a test environment for the project. The news comes after major commercial banks expressed skepticism over their cooperation with domestic cryptocurrency exchanges. The tech supplier will be chosen through an open bidding process, Bank of Korea announced Monday.
BOK takes help from a tech company to set up a pilot platform for the launch of its CBDC.
The tech supplier’s task will be to set up a pilot platform to launch the South Korean central bank digital currency (CBDC). A Reuters report notes that the bank’s plan to research the matter and conduct trials is the first step in that direction taken by Asia’s fourth-largest economy. With the expansion of the cryptocurrency space providing an alternative to traditional finances, dozens of central banks worldwide have set CBDC projects in motion. China has been developing its digital yuan, and as reported earlier, the Federal Reserve is working on digital dollar prototypes.
The share of cash transactions is decreasing significantly.
Speaking during a press briefing, a Bank of Korea’s official commented, “The share of cash transactions is decreasing significantly. The steps we are taking now are to prepare for the changes in the payment settlement system.” The Korean central bank further detailed that the test platform will also facilitate simulations of commercial banks and retail outlets. The trials will also cover mobile phone payments, fund transferring, and deposit processing. The pilot program is scheduled to run between August and December this year, but a second phase may extend the testing.