Home arrow Article arrow Article Detail

The Bank of Korea launched a Pilot project for Central Bank Digital Currency CBDC amid Corona Crisis

Profile Image

Ingle Jayashree

CBW -External Analyst

INDIA

Apr, 08 2020

Apr, 08 2020

likes 0 | comments 0

Article Image

The Central bank of South Korea - Bank of Korea (BOK) has set-off its pilot project to accelerate its efforts to launch its Central Bank Digital Currency (CBDC) amid the coronavirus pandemic.

The preparations of the pilot project had been started in March and will continue till the end of 2021 which roughly has been estimated as 22 months. Though there is currently no demand for CBDC in South Korea, it wants to gain momentum in this project following the footsteps of Japan, the US and China, and France.

As per its public statement, the bank wants to be well prepared in advance for the future. During the period, the project will be evaluated in technical terms and possible legal complications while converting the physical cash with the digital equivalent.

The project will also test design, operation method and the blockchain application of the digital currency.

The Schedule for the Pilot program:

March 2020 – July 2020 (Roughly 5 months) - Design of the CBDC and relevant requirements.

April 2020 – August 2020 (Roughly 5 months) – Evaluation of technological aspects.

September 2020 - December 2020 (Approx. 4 months) -Analysis of Business process and consultation

January 2021 – December 2021 (Approx. 12 months) – Construction and test of the CBDC system.

 Korea Aligning with other Nations to launch CBDC

So far, South Korea has been watchful towards other top nations which are pressing hard to launch their CBDCs.

Looking at the progress of other countries, China is the foremost runner that intends to launch its centralized digital currency by the end of this year. The pilot project of France is also in progress to convert its fiat currency Euro into digital currency.  

Sweden’s pilot project e- Krona is also in the midway. The US too has been positive towards the launch of CBDC. Several other countries as well are evaluating the feasibility of digital currency for their countries.

The European Central bank has also intensified its evaluation of the consequences of the euro CBDC. Japan has reportedly drafted a proposal to digitize its currency.  

In the US, apart from the campaign run by former regulatory chiefs and other influential entities supporting the digital dollar, The US government is affirmative towards the digitization of the dollar.

 Research has been going on about how to combat Facebook’s proposed digital currency Libra by the digitization of the dollar.

South Korea ahead in combating the COVID- 19 Crisis 

The digitization projects of most of the countries have been intensifying as studies have proven that the COVID-19 virus can be active on paper currency for several days. Though the research has not been gained official recognition, the possibility cannot be ignored.

So far, South Korea has done the highest number of corona tests in the world. The number has been as high as 295,000 with 8500 positive cases and 81 deaths. The fatality rate has been very low in South Korea due to its strategic handling of the crisis.

The CBDCs are considered a feasible option to minimize the risk of the spread of coronavirus. Cross border payments can be done instantly with least contamination.


likes 0 Likes | comments 0 Comments

Profile Image

Ingle Jayashree

CBW - External Analyst

INDIA

Comments
WHAT IS AN EXTERNAL ANALYST
banner
Article
Chief Of Digital Money Of Bitcoin

Bitcoin is the chief of digital money on the planet. It's shared money, and exchange framework upheld a decentralized agreement based public record called blockchain that records all...;

Disclaimer: The information is for informational purposes only.​ This advertisement does not constitute financial advice or any other advice. You should consult with a financial professional to determine what may be best for your individual needs. None of the information and/or content available through this advertisement is intended as an offer or solicitation of an offer to buy or sell, or as a recommendation, endorsement, or sponsorship of any company, financial product, security or commodity. To the maximum extent permitted by law, we disclaim any and all liability in the event any information, commentary, analysis, opinions, advice and/or recommendations prove to be inaccurate, incomplete or unreliable or result in any investment or other losses. In Making the investment decision, investors must rely on their own examination of the issuer and the terms of the offerings, including the merits and risks involved. Investments are speculative, illiquid, and involve a high degree of risk , including the possible loss of investment.