On April 6, South Korea’s central bank has made the announcement that it started a pilot program for assessing the logistics of a central bank digital currency (CBDC).
While the bank doesn’t plan to introduce a CBDC very soon, it still had created the pilot scheme to make sure that it’s prepared to do just so in a market that’s continuously changing. After a research conducted in February this year, the pilot for legal and technological requirements of issuing a CBDC has started to roll out. It started in March and should last until December 2021.
Initial Phase of the Pilot Will Run for 5 Months
In the initial phase, the pilot will identify the requirements for designing a CBDC, for 5 months, until July this year. A review of the technology needed to implement a CBDC will overlap this initial phase and begin in April, only to last until August. After these 2 steps, an analysis of the business processes will take place until the end of this year. All through 2021, the CBDC pilot system is going to be built and tested.
No Plans of Going Live Yet…
It was made clear in the announcement that the bank is not looking to release a CBDC too soon in South Korea, but that it’s more focused on research when it comes to the matter. Here’s what has been said exactly:
“The need to issue a CBDC in the near future still remains slim when considering the demand for cash that still exists, the competitive payment service market and high-level financial inclusion, but there is a need to be able to quickly take steps in case market conditions at home and abroad change rapidly.”
…At Least not in South Korea
Meanwhile, China’s central bank is focused on developing its own CBDC, while the Bank of France has proposed to test the CBDC integration into interbank payments systems. The Philippines’ UnionBank’s head said the era of physical cash will entirely end, so the issuance of CBDCs is looking more promising all over the world.