The Bank of Korea (BOK) has just revealed that it plans on picking a technology supplier for building a pilot platform for a digital currency. This means that the country has taken a big step towards creating its CBDC.
The central bank has declared that it is looking for a partner via an open bidding process in order to discover the advantages of launching a CBDC in a test environment.
This decision by the central bank of South Korea comes at a time when cryptocurrencies are beginning to be seen more and more as possible competition for traditional fiat money.
Several central banks around the globe, including Sweden, Great Britain, and China, have announced that they are looking at developing digital currencies in order to modernize their financial systems, push away against the threat of crypto, and make domestic and international payments faster.
According to a survey by the Bank for International Settlements, central banks that represent about one-fifth of the world’s population are likely to issue their own CBDC in the next three years.
The BOK declared: “The share of cash transactions are decreasing significantly. The steps we are taking now are to prepare for the changes in the payment settlement system, changing rapidly.”
This pilot program is scheduled to last between the months of August and December of this year, with the possibility of an extension to 2022, and it will include simulations of commercial banks and retail outlets. The trials will include making deposits, paying using smartphones, and fund transferring.