South Korea is gearing up to launch a large-scale real-world test of its central bank digital currency (CBDC) this March, involving 100,000 consumers and seven major banks.
According to local reports, the pilot will feature financial giants such as KB Kookmin, Shinhan, and Hana Bank, marking a significant step in developing the country’s digital currency.
The initiative is collaborative between the Bank of Korea, the Financial Services Commission, and the Financial Supervisory Service. Under this program, participating banks will issue deposit tokens backed by the CBDC, enabling consumers to make payments at various merchants, including convenience store chain 7-Eleven, Kyobo Book Centre, and delivery service Ddaenggyeoyo.
The trial is expected to run for three months. However, a Bank of Korea spokesperson acknowledged the possibility of a delay until April due to the complexities of coordinating with multiple institutions. Consumers can apply for deposit tokens, capped at 1 million won (approximately $688), and conduct QR-code transactions.
This initiative follows years of planning and adjustments to South Korea’s CBDC roadmap. The country has been exploring the integration of digital currency into its financial system, with previous reports suggesting that the pilot would also incorporate a digital voucher management platform for government-issued vouchers.
However, authorities have yet to confirm a timeline for this additional feature. The FSC revealed that prominent local banks would participate in the pilot project, including Kookmin, Shinhan, Woori, Hana, Industrial Bank of Korea, Nonghyup, and Busan.
South Korea’s growing interest in CBDCs stems from its efforts to establish a state-controlled digital alternative to cryptocurrencies. The Bank of Korea previously noted the nation’s strong crypto trading culture and the increasing investments in blockchain technology by major corporations and startups. As the country moves forward with its CBDC plans, the pilot will provide crucial insights into digital currency’s feasibility and potential adoption in everyday transactions.
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