Korea’s Central Bank Completes First Phase of CBDC Simulation Test Run
The CBDC project has now moved into its second phase where various additional functions including offline payments will be tested
Bank of Korea building in Seoul. Credit: Shutterstock
key takeaways
- South Korea’s central bank is now in the second phase of testing its CBDC following a successful test which began in December
- The basic functions of the bank’s CBDC are “operating normally” under the rigors of a cloud testing environment
The Bank of Korea said Monday the first phase of its central bank digital currency (CBDC) simulation research project, which began in December, had concluded and was now in its second testing phase.
“The basic functions of [the] CBDC … are operating normally,” the central bank said in a statement. The first phase saw the creation of a simulated environment implemented in the cloud where tests were conducted to determine the veracity of the CBDC’s basic functions including manufacturing, issuance and distribution.
The project has now moved into its second phase where various additional functions including offline payments and “personal information protection enhancement technology” will be tested for the possibility of implementation and application, the bank said.
Read also: Fed Opens Debate on CBDC, Takes No Policy Stance
Once the second phase of the project is concluded in June of this year, the bank said it plans to expand CBDC usability experiments and technology verification in cooperation with financial institutions, bringing it one step closer to a live product.
While the experiment is by no means an endorsement that the bank will pursue and introduce a wholesale CBDC into its national economy, it does echo similar tests being conducted by financial institutions worldwide.
Over 40 countries are currently researching either wholesale or retail CBDCs while an additional 16 are in current development. Another 14 are currently in the pilot stage while nine nations, including The Bahamas and Nigeria, have launched a hybrid version.
Meanwhile, in the US, The Bank of America has said a digital dollar issuance would likely hit the world stage sometime around 2025-2030, calling it “inevitable,” according to a report by Bloomberg on Monday.
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