Berita 24 English - South Korea's central bank announced Monday to select a technology vendor to develop a pilot platform for a digital...
Berita 24 English - South Korea's central bank announced Monday to select a technology vendor to develop a pilot platform for a digital currency, bringing the country one step closer to establishing a central bank-backed digital currency.
The Bank of Korea announced that it is seeking a partner through an open bidding process to investigate the feasibility of launching a central bank digital currency (CBDC) in a test environment – the first step in Asia's fourth-largest economy.
The BOK's efforts come as the spread of bitcoin and other cryptocurrencies raises the possibility that alternatives to traditional cash could fundamentally alter how the financial sector operates.
Central banks from China to the United Kingdom and Sweden are exploring the development of digital currencies to modernize their financial systems, combat the threat posed by cryptocurrencies, and accelerate domestic and international payments.
According to a Bank for International Settlements survey, in the next three years, central banks representing one-fifth of the world's population are likely to issue their own digital currencies.
"Cash transactions as a percentage of total transactions are declining significantly," a BOK official said at a news conference.
"The steps we are taking now are intended to prepare for the payment settlement system's rapid evolution."
According to the BOK, the platform will simulate commercial banks and retail outlets, and trials will include payment via mobile phone, fund transfer, and depositing funds.
The pilot program will run from August to December and may be expanded into a second phase the following year.
