Korean internet giants are offering to test the central bank’s digital currency

The subsidiaries of the South Korean internet giants Naver and Kakao are among the leading candidates for participation in the Central Bank’s first pilot programs for digital currencies (CBDC).

On Monday, the Bank of Korea (BoK) announced the preliminary bid results for the participating digital award-winning pilots, local news agency Yonhap reported. Kakao’s blockchain subsidiary Ground X, Line Plus, which belongs to Naver, and the SK Group are the first three to apply for a 10-month CBDC pilot contract.

The BoK is now planning to select an operator who will carry out a blockchain-based simulation project for digital victory. The bank is expected to make a decision next month. The pilot runs through June 2022 with a research budget of 4.96 billion won ($ 4.3 million).

According to the report, the pilot project aims to test CBDCs in a virtual simulation environment based on distributed ledger technology. The BoK intends to investigate potential use cases in connection with the issuance, redemption, payment and electronic processing of CBDC as well as the purchase of digital and copyrighted works of art.

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In May, the BoK started the bidding process to select a technology partner in order to examine the advantages and effects of the CBDC implementation. Previously, the central bank had published a book on CBDCs in February, in which it officially announced the country’s plan to investigate the distribution of the digital won.

The news comes shortly after Line Plus released its own blockchain platform optimized for issuing and maintaining CBDCs. The new open source project is based on Line’s own blockchain technology and is intended to support security-oriented payments and high-speed transactions.