South Korea’s monetary policy regulator is taking steps to create its own digital coin. Bank of Korea is now seeking a technology provider to develop a test environment for the project. The news comes after major commercial banks expressed doubts over their association with domestic cryptocurrency exchanges.
Central Bank of Korea will launch pilot platform for CBDC
The technical supplier will be selected through an open bidding process, Bank of Korea (Bok) Announced Monday. Its task will be to establish a pilot platform for the launch of the South Korean central bank Digital Currency (CBDC). A Reuters report said that the bank’s plan to research and test the matter is the first step in that direction taken by Asia’s fourth-largest economy.
With the expansion of the cryptocurrency space providing an alternative to traditional finance, dozens of central banks around the world have given impetus to CBDC projects. China is developing its own Digital yuan, The Federal Reserve is working Digital dollar The prototype, the ECB of the Eurozone, is considering whether to create a Digital euro, And the Bank of Russia will present a Digital ruble Prototype this year. Speaking during a press conference, a BOK official commented:
The share of cash transactions is declining significantly. The steps we are taking now are to prepare for a change in the payment settlement system.
The Korean central bank further elaborated that the testing platform would facilitate the simulation of commercial banks and retail outlets. The tests will also include mobile phone payments, fund transfers and deposit processing. The pilot program is scheduled to run between August and December this year, but a second phase of testing may extend.
Commercial banks reluctant to work with crypto exchanges
While the Korean central bank is preparing to explore options for issuing state-controlled digital currency, decentralized cryptocurrency has attracted the attention of South Koreans. Local value Of leading cryptocurrency, B T c, Reached a record high of around $ 62,000 this year, but Market volatility Regulatory concerns have been raised. Recently BOK Having said Its intention to closely monitor crypto transactions Real Name Accounts used by Korean merchants.
However, major banking institutions have expressed doubts over their association with cryptocurrency exchanges. According to a report by the Korea Herald, financial groups such as HANA have decided not to issue real-name bank accounts for crypto trading. Others, who own a bank that allows accounts for crypto merchants on Upbit, see little reason to do so. As a top Voori official, Voori being the second largest shareholder of KB, Yonhap quoted as saying:
Returns from alliances with crypto exchanges, mostly from trading fees, potential money laundering issues and risks from hacking attacks, are not very high.
Upbit is one of only four domestic crypto exchanges with Bithumb, Coinone and Corbit, currently working with commercial banks to implement the real name. system. In April, the Financial Services Commission of Korea Warn About 200 coin trading platforms currently operating in the country can be closed under the new rules coming into force in September. Registration of real-name accounts is one of the major requirements that small crypto exchanges fail to meet.
What do you think about Bank of Korea’s plan to develop a digital currency? Share your thoughts on the project in the comments section below.
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