Bank of Korea to start CBDC trials
The Bank of Korea is eager to join the list of banks that have recently launched pilot projects for central bank digital currency (CBDC). It plans to select an operator who will be responsible for managing different phases of the blockchain-based project. The project is supposed to start next month, in August.
Calls for tenders and applications
A large number of companies have submitted applications for the Bank of Korea to entrust them with the management of this project. However, there are two in particular that stand out from the rest: South Korean tech giants Naver and Kakao.
Local Yonhap news agency reports that the bank has already released preliminary tender results. The media also reminds us that among those who responded to the call, three were in the spotlight: Ground X, the blockchain subsidiary of Kakao, Line Plus (an affiliate of Naver) and the SK Group conglomerate. The three companies applied for a 10-month CBDC project management contract.
Now the Bank of Korea has to make a decision sometime next month. It must be noted that the project will take on a massive scale: it is set to be running until June 2022, with a budget of 4.96 billion Korean won, or around £3.1 million, until the CBDC is deployed.
Explore all possible use cases
It looks like the Bank of Korea is determined to make digital currency happen. In February 2021, it published its research on CBDCs and unveiled the country’s plans for the digital won trials. Then, in May, it launched a call for tenders to select a partner to study the different aspects of the digital currency launch project.
With this project, the bank hopes to test digital money in several use cases before deciding whether to work on it further or abandon the project. For example, as part of the trials, electronic payments and settlements will be made using the new currency. It will also be used to purchase digital works of art as well as copyright.
The Bank of Korea supports the launch of a CBDC to facilitate and secure business transactions between all market participants. The project will run until 2022 and will be piloted by a single company chosen from multiple applicants. In August, the Bank will reveal the name of the lucky winner.