Korea's central bank progresses on wholesale digital currency project

The Bank of Korea (BoK) has made significant strides in the development of a wholesale central bank digital currency (CBDC), working in collaboration with the Bank for International Settlements (BIS), the Financial Services Commission (FSC), and the Financial Supervisory Service (FSS). This update came on Monday, with FSS First Deputy Governor Lee Myung-soon emphasizing the importance of this move towards shaping the future monetary system.

The BIS is expected to contribute its unified ledger concept to this project, leveraging expertise gained from past initiatives such as Project Icebreaker and the mCBDC pilot. This approach aims to create a more efficient and secure platform for financial transactions, aligning with global trends towards digitalization in the monetary sector.

On another front, BoK’s retail CBDC pilot in Jeju, Incheon, and Busan has faced some challenges. These include stiff competition with existing micropayment services and the need for increased staffing. Despite these setbacks, the BoK maintains that there is no immediate necessity for a CBDC in Korea, indicating that these trials are primarily in preparation for potential future implementation.

This ongoing effort by the BoK and its partners underscores a proactive approach towards potential shifts in global financial systems. While there may be no immediate need for a CBDC in Korea, the country’s central bank is ensuring it remains prepared for any eventualities.

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