South Korea to Test CBDC with 100,000 Participants in 2024

The Bank of Korea (BOK), the central bank of South Korea, has revealed its innovative proposal to include 100,000 Korean nationals in a test program for its digital currency (CBDC). This action, which is scheduled to start in the fourth quarter of 2024, is intended to evaluate how effectively and practically the digital money may be distributed and used.

Citizen Participation in CBDC Testing

An important step forward in the development of digital currencies will be taken when the BOK, in a novel effort, invites 100,000 residents of Korea to participate in the CBDC trial. Three months will pass during the testing phase, which is expected to begin in September or October of 2024. With limitations on how they may store, exchange, or transfer the virtual money to other users, participants will be able to use the CBDC only for payments.

Thoroughly assessing the viability and efficacy of the CBDC issuance and distribution procedure is the main goal of this pilot stage. The BOK’s dedication to guaranteeing the digital currency’s practical applicability and user-friendliness is closely aligned with the novel strategy of incorporating citizens.

The BOK and Korea Exchange are working together to incorporate the CBDC into a simulation system for carbon emissions trading, continuing their partnership beyond consumer transactions. Testing the viability of delivery versus payment transactions will be made possible by this integration. The BOK’s statement highlights the comprehensive approach, indicating that the pilot project would continue until the fourth quarter of 2024 and that other pilots may be considered based on bank proposals for new, independent initiatives.

Agustin Carstens, general manager of the Bank for International Settlements (BIS), who has called the Korean CBDC initiative the “digital won,” is in Seoul at the same time that the BOK is making these announcements. This calculated action demonstrates South Korea’s commitment to being at the forefront of innovation in digital currencies.

The BOK had previously announced that the CBDC pilot had begun in October, suggesting that commercial banks, state institutions, and the Bank for International Settlements (BIS) would be involved in an extensive testing period.