South Korea to invite 100K citizens to test CBDC in 2024

Participants will be restricted to using the CBDC only for payment, without an option to store, exchange or send it to other users.

The Bank of Korea (BOK) — South Korea’s central bank — has said it will invite 100,000 Korean citizens to purchase goods with deposit tokens as part of its central bank digital currency (CBDC) pilot. The testing will start “around September to October” of 2024 and last for three months. 

According to a Korea Times report from Nov. 23, participants will be restricted to using the CBDC only for payment, without an option to store, exchange or send it to other users. The goal of the pilot stage is to evaluate the feasibility and effectiveness of issuing and distributing the currency.

The BOK will also collaborate with the Korea Exchange to integrate its new digital currency into a simulation system for carbon emissions trading to test the feasibility of delivery versus payment transactions. The BOK statement cited by the newspaper said:

“[…] The pilot project will be conducted first in the fourth quarter of 2024. The possibility of conducting separate pilots will be considered as well if banks propose new individual projects.”

The statements from the BOK coincided with a visit to the country’s capital, Seoul, by Agustin Carstens, general manager of the Bank for International Settlements (BIS). Carstens has publicly referred to the Korean CBDC project as the digital won.

Related: IMF head: CBDCs can replace cash, help financial inclusion

The Bank of Korea announced the launch of the CBDC pilot in October. The pilot, testing retail and wholesale CBDCs, will include private banks and public institutions, while the BIS will provide expert technical support.

The BIS is at the forefront of global CBDC adoption. It is helping the Swiss National Bank to develop a wholesale CBDC, as well as assisting in building a joint platform with the central monetary authorities of China, Hong Kong, Thailand and the United Arab Emirates. It’s also developing a proof-of-concept for a transactions tracker with the European Central Bank, among numerous other projects.

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