- The pilot project’s objective is to analyze the technological support necessary for a CBDC.
- The Bank for International Settlements has offered its experience in providing technical help.
Following the lead of other countries, South Korea has decided to launch a trial program of CBDC. Plans to investigate the CBDC’s technological foundation were recently announced by the Bank of Korea (BOK), the Financial Services Commission (FSC), and the Financial Supervisory Service (FSS).
Notably, the FSC and the FSS are also participating in this initiative. Although the Bank of Korea (BOK) is taking the lead. On October 4th, a joint statement was made about the CBDC pilot program, marking a major milestone in the country’s advancement towards CBDC.
Collaborative Approach
Moreover, this pilot project’s major objective is to analyze the technological support necessary for a CBDC. And to weigh the advantages and disadvantages. Importantly, it will investigate the potential for a future monetary system based on “wholesale CBDCs,” or digital currencies intended for use by financial institutions and banks.
Not only will public institutions like universities and hospitals be included in the trial program, but also commercial banks. Also, South Korea has chosen an integrative approach to this project. And the Bank for International Settlements (BIS) has offered its experience in providing technical help.
Meanwhile, CBDCs sold at retail and those sold in bulk will both be included in the testing procedure. Under the watchful eyes of the BOK, the FSC, and the FSS, participant banks in wholesale CBDCs will tokenize their deposits and circulate them throughout a network.
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