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The Bank of Korea has successfully completed the first phase of a simulation test of a central bank digital currency that will begin in August 2021.
The Bank of Korea said that the first phase of its CBDC mock test was completed in December, while the second phase is currently underway, report YNA News. The first stage of the mock test involves some basic functions of a sovereign digital currency, such as issuance and issuance.
The second phase of the central bank digital currency (CBDC) pilot will test real-world capabilities such as cross-border remittances, retail payments and offline payments. The bank said:
“We will confirm the possibility of operating various functions, such as offline settlement, and the application of new technologies, such as those aimed at enhancing privacy protection, in the second phase of testing.”
The Bank of Korea (BOK) is also looking at financial institutions for the second phase, much like what China is currently doing with its digital yuan. However, unlike China, the digital currency issued by BOK will also focus on user privacy.
The second phase is expected to be completed by June 2022, after which the central bank plans to develop a formal launch and commercialization plan.
Related: Does the Federal Reserve’s Digital Dollar Leave Any Room for Crypto Stablecoins?
As such, South Korea joins a select group of countries that have started or completed the pilot phase of CBDC testing. According to the Atlantic Council, 91 countries are currently developing their sovereign digital currencies, and only 14 are in the pilot phase.
South Korea has become one of the leading countries Encryption Compatible Countries In the past few years, it has also recently revealed its plans to become a leader in the virtual world.While China is currently at the forefront of the CBDC game, many European and Asian counterparts Already ramped up their development plans to keep up with it.
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