South Korea Set to Pilot CBDC Q4 2024

Table of Contents

• Bank of Korea Invites 100,000 Citizens to Participate in CBDC Pilot
• South Korea Names Three Regions for CBDC Pilot

The Bank of Korea (BOK) announced it will pilot a central bank digital currency (BDC) involving 100,000 citizens in Q4 2024.

The South Korean central bank said it will launch a pilot program for a CBDC in the fourth quarter of next year. The pilot will involve 100,000 citizens.

Bank of Korea Invites 100,000 Citizens to Participate in CBDC Pilot

According to reports from the Korea Times, the BOK will invite 100,000 Korean citizens to purchase goods with deposit tokens as a part of its CBDC pilot. The report indicates testing will start “around September to October” of next year and will run for three months. The pilot aims to test the feasibility and effectiveness of issuing and distributing a CBDC.

The pilot will be a joint effort between the Bank of Korea and the financial regulator, the Financial Services Commission (FSC) and the Financial Supervisory Service (FSS). Participants will be restricted to using the CBDC for payment only and may not store, exchange, or send it to other users.

The Korea Times report cites an official from the BOK who said:

“Following consultations with relevant organizations and a review of related laws, the pilot project will be conducted first in the fourth quarter of 2024. The possibility of conducting separate pilots will be considered as well if banks propose new individual projects.”

In addition to testing the feasibility and effectiveness, the BOK will collaborate with the Korea Exchange to integrate the CBDC into a simulation system for carbon emission trading. In doing so, the pilot program will test the feasibility of delivery versus payment transactions between the payment tokens and carbon emissions rights.

South Korea Names Three Regions for CBDC Pilot

In July, the Bank of Korea announced a shortlist of three regions for potential CBDC testing. According to a report at the time, the BOK chose Jeju, Busan and Incheon as candidates for CBDC testing. South Korea’s capital city, Seoul, did not make the cut. Jeju reportedly has the highest chance of becoming the CBDC pilot site:

“In the case of Busan, the number of eligible citizens is so large that the Bank of Korea is burdened in many ways, so the opinion was greatly inclined to Jeju, which has the next largest population.”

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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