First phase of digital currency trial is now completed by Bank of Korea

The CBDC mock testing’s second round is planned to be completed by June of this year.

The first phase of the Bank of Korea’s central bank digital currency mock testing, which began in August 2021, has been completed successfully.

The first round of the South Korean central bank’s CBDC simulated testing was finished in December, and the second step is presently ongoing, according to YNA news. The first round of the mock test focused on some of the sovereign digital currency’s most basic functions, such as distribution and issue.

The central bank digital currency (CBDC) pilot’s second phase would put real-world functionalities including cross-border remittance, retail payments, and offline payments to the test. According to the bank:

“During the second phase of the test, we will confirm the ability to operate various functions, such as offline settlements, and the use of new technologies, such as one aimed to increase privacy protection.”

For the second phase, the Bank of Korea (BOK) is trying to onboard financial institutions, similar to what China is doing with its digital yuan. Unlike China, however, BOK-issued digital currency would prioritise user privacy.

The central bank intends to complete the second phase by June 2022, following which it will develop an official launch and commercialization strategy.

As a result, South Korea has joined a restricted group of countries that have either begun or finished the pilot phase of CBDC testing.

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South Korea has lately revealed its aspirations to become a world leader in the metaverse, as well as one of the major crypto-compliant nations in recent years. While China is now leading the CBDC game, many European and Asian peers have hastened their development plans in order to keep up with it.

 

Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.

 

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