Central Bank Of Korea To Test CBDC Payments For Private Sector In 2024

Key points:

• The Central Bank of Korea has announced that it will begin a CBDC payment experiment next year.
• Korea will start a CBDC private distribution system for commercial banks.
• Last year, 15 banks participated in the CBDC connection trial between the Bank of Korea and institutions.

According to media Chosun, The Central Bank of Korea’s central bank-issued digital currency (CBDC) will begin its first payment test (empirical test) to the public in 2024.

The Bank of Korea has begun a technical review to issue a CBDC in 2020, built a platform for online and offline payments, and completed simulation testing with commercial banks last year.

A source from a commercial bank said that the Bank of Korea would publicly solicit small-value payment type CBDC trials for financial institutions that participated in last year’s CBDC simulation test in July this year. Based on this, CBDC pilot testing will be conducted for the public next year.

The CBDC Test Subject is a ‘type of micropayment’ that can be used by general financial consumers. CBDCs are divided into bulk payment CBDCs used for payments between financial institutions and micropayments CBDCs used by all economic actors, including the general public, depending on the user object.

Cooperation with the Bank of Korea and commercial banks is critical to testing the use of micropayment CBDCs. Last year, 15 banks participated in the CBDC connection trial between the Bank of Korea and institutions, including KB Kookmin Bank, Shinhan Bank, Hana Bank, Woori Bank, and NH Nonghyup Bank.

The location and form of research on the introduction of CBDCs have been carried out differently depending on the economic situation of each country. Developing countries have been promoting the issuance of CBDCs for financial inclusion, and developed countries to stabilize the financial system.

“We recently expanded the organization of the digital currency research group, and we plan to conduct more diverse research in the future.”

A Bank of Korea official said.

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