South Korea’s central bank is planning to conduct a mock test on the functionality of a central bank digital currency (CBDC), according to reports.
The primary purpose of the test is to check whether the CBDC can serve settlement and remittance for the purchase of goods and services.
The test will begin in August 2021 and will conclude in June 2022. The central bank has yet to pick an operator for the pilot, but will open the opportunity up to bidders. The bank has alluded to CBDC efforts in the past, though this is the most substantive effort to date.
The Bank of Korea also emphasized that it does not necessarily intend to release a digital currency. The goal of the trial run is only to check the feasibility and effectiveness of a CBDC.
South Korea has been taking large steps towards the implementation of cryptocurrencies and related technologies. This includes making several regulatory changes and creating guidelines for the market. The nation is one of the most tech-savvy in the world, and its citizens are already widely familiar with the cryptocurrency market.
With this latest development, the nation now joins several others in taking their economic digitization efforts to the next level. All signs point to a more robust cryptocurrency regulation framework, as authorities have been working on taxation rules and other laws, like the banning of privacy coins.