According to a Reuters report, the South Korean central bank announced on Monday that it would select a technology provider to build a pilot digital currency platform to move one step closer to creating a central bank-supported digital currency.
South Korea is seeking a technology partner through its Apex financial institution, the Bank of Korea, to advance the pursuit of a central bank digital currency (CBDC).
The pursuit of a CBDC among major economies has taken a new leap in 2021. The UK and US have now officially joined the rally that has picked up speed with the COVID-19 pandemic. The pursuit of these new forms of money on a broad front is supported by the recognition that cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH) and stablecoins are becoming increasingly important in global payment systems. Central banks are pushing to debut their own digital currency in order to keep fiat currencies relevant in today’s digital world.
The Bank of Korea said it would select the technology partner based on an open bidding process. The main objective of the exercise will be to examine the practicalities of adopting a central bank digital currency (CBDC) in a test environment.
“The share of cash transactions is falling significantly,” said a BOK official at a press conference. “The steps we are taking now are to prepare for the changes in the payment system, which are changing rapidly.”
The test program, which will be billed from August through December this year, is expected to include simulations of central banks and retail ATMs. According to the Bank of Korea, the trials will include cell phone payment, transferring funds, and depositing.
Other prominent Asian countries with active CBDC activities are China, Hong Kong and Japan. China leads the race as the country has entered the retail and trade testing phase for its Digital Yuan program.
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