Monday, November 28, 2022
 

Korean Apex Bank Completes Two Testing Stages for its CBDC

  • Korean central bank tested a program that facilitates cross-border payment via CBDC.
  • It also confirmed that offline CBDC translation was possible.
  • Previously, India released a report for establishing retail and wholesale CBDC for individuals and businesses.

The Bank of Korea (BOK) is exploring policies to support payment services, including cross-border remittance via Central Bank Digital Currency (CBDC). According to a local report, the Korean central bank has completed a two-phase CBDC simulation research project that lasted ten months.

The BOK built a distributed ledger-based CBDC simulation environment from August through December last year and evaluated fundamental operations, including manufacture, issue, distribution, and redemption.

In the second phase, the apex bank experimented with extended functions such as offline transactions up until June this year. Additionally, it tested the possibility of applying new technologies such as Zero Knowledge Proof (ZKP).

Interestingly, the Korea Bank also experimented with purchasing NFTs with central bank digital currencies built on different distributed ledger platforms.

Recently, major economies, including the US, UK, and China, have explored the issuance of CBDCs. However, the governor of the central bank of the United States, Christopher Waller, recently opposed calls for the US Federal Reserve to launch a digital currency.

Waller said he is not a big fan of the CBDC idea, but he is open to having someone convince him that it is something of value. He concluded: “It’s not clear why China is giving their citizens a checking account at the People’s Bank of China, why that’s going to undermine the dollar’s reserve role in the global payments system.”

On the other hand, the Reserve Bank of India (RBI) released a 50-page concept note last month for launching a digital currency. In the report, the country looks forward to establishing a retail CBDC for individuals and businesses and a wholesale CBDC to simplify interbank transactions.

  • Korean central bank tested a program that facilitates cross-border payment via CBDC.
  • It also confirmed that offline CBDC translation was possible.
  • Previously, India released a report for establishing retail and wholesale CBDC for individuals and businesses.

The Bank of Korea (BOK) is exploring policies to support payment services, including cross-border remittance via Central Bank Digital Currency (CBDC). According to a local report, the Korean central bank has completed a two-phase CBDC simulation research project that lasted ten months.

The BOK built a distributed ledger-based CBDC simulation environment from August through December last year and evaluated fundamental operations, including manufacture, issue, distribution, and redemption.

In the second phase, the apex bank experimented with extended functions such as offline transactions up until June this year. Additionally, it tested the possibility of applying new technologies such as Zero Knowledge Proof (ZKP).

Interestingly, the Korea Bank also experimented with purchasing NFTs with central bank digital currencies built on different distributed ledger platforms.

Recently, major economies, including the US, UK, and China, have explored the issuance of CBDCs. However, the governor of the central bank of the United States, Christopher Waller, recently opposed calls for the US Federal Reserve to launch a digital currency.

Waller said he is not a big fan of the CBDC idea, but he is open to having someone convince him that it is something of value. He concluded: “It’s not clear why China is giving their citizens a checking account at the People’s Bank of China, why that’s going to undermine the dollar’s reserve role in the global payments system.”

On the other hand, the Reserve Bank of India (RBI) released a 50-page concept note last month for launching a digital currency. In the report, the country looks forward to establishing a retail CBDC for individuals and businesses and a wholesale CBDC to simplify interbank transactions.

 

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