South Korea has announced through the authorities of its Central Bank, that by next year they will have their own CBDC. In this sense, they explained that the technical phase that will conduct the first pilot tests for 2021 will begin shortly.
The information was provided by the Korea Times, who explained that the nation is looking for formulas for the second phase of testing. To do this, they assure that a consulting association 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 for this CBDC. The initiative by Seoul to launch its own sovereign digital currency is inspired by fear of China, a nation that already has a lot of ground covered in this matter.
A proprietary CBDC is a priority for Korea
The progress of the People’s Republic of China in developing a Central Bank Digital CurrencyThey are colossal. Faced with this, South Korea does not want to be left behind in the race for supremacy in this new form of commerce that will come with the CBDC.
Although, on the one hand, the officials of the Central Bank of Korea explained that a sovereign digital currency is a necessity, on the other they assure that it is not a hopeless race.
According to its spokesmen, it is about developing a CBDC for Korea, which should be ready when other nations already have their own currencies and the international market is mature. Only at that stage, they assert, would the Korean currency come into play.
First phase finished
Among the information cited by the aforementioned portal, it stands out that the first review phase was completed last month. After it, the land will begin to be paid for the pilot tests, of which the second phase consists.
These tests, as said above, will be next year 2021, in its last stage. Meanwhile, the Bank of Korea announced that the search stage of the companies in charge of designing the CBDC has begun.
In this sense, those firms that consider that they meet the requirements for this project, should contact the authorities. It should be noted that no details were provided on how the selection process of the firm that will become a Central Bank company will be.
The company with which the Bank of Korea partners will be responsible for the entire architectural design of the future CBDC. In other words, from applications, data management and security. All of this will form 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 the architecture with which the CBDC system will operate. Then, both will actively participate in specific action plans for the pilot program to be successful”Said Lee ju-Yeol, Governor of the Bank of Korea.
The last step for the Korean financial institution will be for its CBDC to operate in the market with its business partners. At this stage, other nations should already have their own versions of digital currencies ready.
Data to take into consideration
- Last July, South Korea’s first evaluation phase of the CBDC was completed.
- By the end of 2021, the second phase will enter into action with a pilot program.
- For the architecture design of the CBDC, the Central Bank of Korea will partner with a local company.
- Seoul’s main drive to launch its own sovereign currency is China’s aggressive development in this area.
The information in this content has been extracted from reliable sources that are detailed below:
1- Professional content management by the authors of CriptoTendencia.
2- External sources: Koreatimes.com.kr and CoinDesk.com.