South Korea’s central bank is set to launch a pilot program to test the viability of a central bank-issued digital currency (CBDC) in the second half of this year.
In a report released on Wednesday, the Bank of Korea (BOK) unveiled plans to test the CBDC’s entire lifecycle of issuance-circulation-withdrawal as well as its service functions such as remittance and payment through a simulation test in a virtual environment.
According to the schedule identified in the report, the BOK completed the design of work process and system structure and established an action plan for the pilot program after receiving simulation test-related consulting back in March.
During the period from June 2021 to January 2022, the BOK plans to carry out the establishment of the CBDC simulation system and the test-run in a virtual environment.
“After setting up the central bank’s internal process, we will check the viability of CBDC circulation and work process together with other financial institutions and IT companies,” said Lee Jong-ryul, head of the financial payment bureau at the central bank.
With respect to the possibility of actual issuance, however, he took a cautious approach, saying, “The pilot project is a CBDC study rather than a premise for actual issuance.”