The central Bank of South Korea announced that it has launched a pilot program to assess the logistics of issuing a central bank digital currency — or CBDC. Accoridng to the release the pilot will comprise a technological and legal review of CBDC issuance. It began in March and is scheduled to run for 22 months, through to December 2021.
The initial phase is to define the requirements and design of the CBDC, to run for five months until July 2020. This will overlap a review of the technology required to implement the currency, which is scheduled from April until August.
Following this, there will be an analysis of business processes, lasting until the end of 2020. Finally, the whole of 2021 should see a 12-month build and test of the CBDC pilot system.
The announcement made clear that the bank does not see an immediate need to release a digital currency in South Korea, rather that, based on other nations’ research in the field. The Central bank wishes to be prepared in case such a move becomes a necessity, as per the statement “The need to issue a CBDC in the near future still remains slim when considering the demand for cash that still exists, the competitive payment service market and high-level financial inclusion, but there is a need to be able to quickly take steps in case market conditions at home and abroad change rapidly.”
