Two of South Korea‘s major internet businesses are considered to be among the front-runners for the country’s planned CBDC trial.
According to reports, Naver and Kakao subsidiaries in South Korea have filed bids for the 10-month blockchain pilot program, which would seek to simulate the viability of a central bank digital currency. Kakao’s blockchain subsidiary Ground X and the Naver-affiliated Line Plus submitted proposals to South Korea’s central bank. The Bank of Korea is currently reducing the field, with plans to pick the successful bidder soon to conduct the pilot program.
The CBDC pilot program is set to last until June 2022
With a budget of 4.96 billion won ($4.3 million), the digital currency pilot is set to continue through June 2022. The CBDC, also known as the digital won, will be tested in a virtual environment using distributed ledger technology as part of the pilot program. In addition, the bank will utilize the pilot scheme to investigate various CBDC uses, including issuance, redemption, electronic payments, settlement, digital media, and intellectual rights management. The Korean central bank originally solicited bids for the contract in May, looking for a tech partner to help them investigate the pros and concerns of launching a CBDC.
Central banks are still investigating CBDCs
Previously, in a joint report to the G20, the IMF, World Bank, and Bank of International Settlements (BIS) proposed that a cross-border network of central bank digital currencies (CBDCs), underpinned by efficient technological integration and proactive international cooperation, could be of significant benefit to the global economy. As a result, major central banks are intensively exploring the alternatives for digital currencies across the world. The UAE, the United States, Canada, Russia, and China are all working on CBDCs.