Disclaimer: Information found on CryptoreNews is those of writers quoted. It does not represent the opinions of CryptoreNews on whether to sell, buy or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk.
CryptoreNews covers fintech, blockchain and Bitcoin bringing you the latest crypto news and analyses on the future of money.
The Central Bank of South Korea is preparing to “accelerate” its CBDC initiative and will conduct a pilot of its digital KRW with a cohort of 100,000 citizens later this year.
As reported by Newsway, the Bank of Korea (BOK) plans to evaluate the usability and deposit functionalities of the digital KRW with this group “by the end of 2024.”
South Korean Central Bank Plans Real-world Trials in Q4
In October of the previous year, the BOK revealed intentions to initiate “CBDC usability tests” in collaboration with the country’s leading regulators, the Financial Services Commission and the Financial Supervisory Service.
Legislators have also enacted a law that distinguishes between CBDCs and cryptocurrencies such as Bitcoin (BTC).
The bank has disclosed its strategy to “establish a pilot CBDC network.” This network will “issue and distribute” three “types” of tokens “based on institutional CBDC frameworks.”
The outlined plans will enable the BOK to “issue and distribute” “deposit-style” tokens and “e-money tokens.” The bank indicated that the launch would occur in “the fourth quarter of the year.”
Real-time Trials to Commence in 2024
The bank further stated that it will conduct “real-time transaction tests” with “ordinary citizens,” aiming for participants to trial the CBDC “in commercial environments.”
Nonetheless, several critics argue that the introduction of a South Korean CBDC could adversely affect the nation’s growing fintech and banking industries.
Seo Ji-yong, a Professor of Business Administration at Sangmyung University, remarked that CBDC “commercialization will require time” in South Korea.
Related Posts
Seo also noted that “as the CBDC project becomes more defined,” there is “a chance that private enterprises will initiate corresponding projects.”
The headquarters of the Bank of Korea in Seoul, South Korea. (Source: Mostly1)
Indeed, some companies have already begun this process. Some of the largest technology firms and banks in the country initiated CBDC operations several years ago. Seo stated:
“The digital KRW is still in the pilot phase. Therefore, we must observe how [the private sector] reacts.”
A BOK representative clarified that “since current card transactions incur fees, merchants can lower costs by utilizing the CBDC.”
Retailers to Benefit if CBDCs Launch?
Similar views have been voiced in other countries that are currently expediting their CBDC initiatives.
In Russia, financial analysts have suggested that the domestic retail sector would likely be the primary beneficiary.
The banking sector, according to the analysts, could face a loss of $536 million annually if the digital ruble is implemented.
However, the BOK representative sought to reassure the private sector that it does not intend to intrude upon their business domains. The spokesperson stated:
“Instead of threatening other existing industries, the commercialization of CBDC will introduce new innovative services. It can act as a catalyst for industrial advancement.”
The post South Korean Central Bank to ‘Speed up’ CBDC Project appeared first on Cryptonews.
