South Korea will have its own CBDC

South Korea has announced through its Central Bank authorities that they will have their own CBDC by next year. In this sense, they explained that the technical phase that will conduct the first pilot tests by 2021 will begin shortly.

The information was provided by Korea Times, who explained that the nation is looking for formulas for the second phase of tests. To do so, they assure that a consulting partnership with a company that works closely with the Central Bank would be needed.

At the same time, the Korean national company will be in charge of designing the architecture that this CBDC will have. Seoul’s initiative to launch its own sovereign digital currency is inspired by fear of China, a nation that already has quite a bit of ground to make up in this area.

A Korean CDB is a priority for Korea

The advances of the People’s Republic of China in the development of a Central Bank Digital Currency are colossal. In the face of this, South Korea does not want to be left behind in the race for supremacy in this new form of trade that will come with the CBDCs.

While Korean Central Bank officials explained that a digital sovereign currency is a necessity, they also said that it is not a desperate race.

According to their spokespersons, the idea is to develop a Korean CDB, which should be ready by the time other nations have their own currencies and the international market is mature. Only at that stage, they say, would the Korean currency come into play.

First phase completed

Among the information cited by the mentioned portal, it is highlighted that last month the first phase of the review was completed. After it, the land will be fertilized for the pilot tests, which is the second phase.

These tests, as it was said above, will be next year 2021, in its last stage. Meanwhile, the Bank of Korea announced that the search for the companies in charge of the design of the CBDC has begun.

In this sense, those firms that consider that they meet the requirements for this project should contact the authorities. It is worth mentioning that no details were offered regarding the selection process of the firm that will become a member of the Central Bank.

The Bank of Korea announces that the first test period of its CBDC will take place in 2021.
Bank of Korea announces that the first test period of its CBDC will take place in 2021.

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Architectural Design
The company with which the Bank of Korea is associated will be responsible for all the architectural design of the future CBDC. In other words, the applications, data management and security. All this will be the basis of the pilot program.

„The Central Bank of Korea will work closely with an advisory partner to evaluate the entire work process and architecture with which the CBDC system will operate. Then, both will actively participate in the specific action plans to make the pilot program successful,“ said Lee ju-Yeol, Governor of the Bank of Korea.

The final step for the Korean financial institution will be to have its CBDC operate in the marketplace with its business partners. At this stage, other nations should already have their own versions of digital currencies ready.