South Korea’s central bank, The Bank of Korea (BOK), in collaboration with the Financial Services Commission (FSC) and Financial Supervisory Service (FSS), is making strides in the digital currency space. On Wednesday, the trio announced a pilot project to explore central bank digital currencies (CBDCs), with support from the Bank for International Settlements (BIS). The initiative will investigate both retail and wholesale CBDCs, setting the stage for live trials in Q4 2024.
First Deputy Governor of the FSS, Lee Myung-soon, views this development as a significant stride towards creating a prototype for the future monetary system. This perspective aligns with opinions from Banque de France, which sees CBDCs as a potential game-changer for cross-border payments.
The platform, expected to launch in Q4 next year, will facilitate transactions using wholesale and retail CBDCs for banks, institutions, and individuals. The system is designed to streamline payment settlements and interbank funds transfers while facilitating security token offerings.
The initiative aligns with BOK’s digital transition plans and aims to improve government fiscal soundness by enabling more efficient transaction processes. Retail CBDC testing for the public is also planned as part of this initiative.
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