A recent news report revealed that the Bank of Korea is planning to start its central bank digital currency CBDC exploration next and has selected several locations in the country except for Seoul, which is its capital city.
According to the report, the Bank of Korea (BoK) has started on its road towards implementing its CBDC as it announced the location where it would deploy the pilot tests for its digital currency outside Seoul next year.
In addition, the country reportedly chose three regions to use as the private test bed for the upcoming CBDC pilot program. The cities included Incheon, Busan, and Jeju. Also, the BoK stated that one of these cities would be selected for further experimentation like distribution, public settlements, and developing franchises that can accept CBDC payments.
Furthermore, the apex bank is reportedly collaborating with the technology giant Samsung to jointly develop a platform that would facilitate CBDC offline payment.
As revealed by an official of a commercial bank in Korea, the number of people that are eligible to use the digital currency in Busan, the largest of the selected area in population, is quite substantial, this consequently poses many challenges to the apex bank towards achieving their aim. And as such, the Bank of Korea is reportedly tilting toward Jeju, the second-largest selected region in terms of population, as the favorite test bed.
Citizens And Tourists Can Access South Korea’s CBDC Payment System
According to the report, the Bank of Korea wants the private tests pilot program for the digital currency, which is coming up soon in Busan, Jeju, and Incheon, to reflect the issuance, adoption, and distribution arrangement of their current fiat currency schemes.
In other words, each local currency in the selected regions, such as Incheon e-Eum in Incheon, Dongbaekjeon in Busan, and Tamranjeon in Jeju, has been a major pivot for an economic boost in Korea, especially during the mandated locked down caused by the COVID-19 pandemic, the Bank of Korea stated.
Nonetheless, the purpose for venturing into the development of the CBDC goes beyond wanting to have an alternative for the local currency. Instead, the apex bank reportedly plans to integrate its CBDC into a digital wallet app to serve the needs of South Korean residents, tourists, and civilians by aiding the transformation of the payment structure and facilitating financial inclusion in the country.
According to a local news source, the digital currency development mission embarked on by the Bank of Korea mainly aims to provide a seamless and secured online and offline payment settlement method for South Korean citizens and foreigners residing in the country via its wallet app.
Expert Said BoK Needs Many IT Professionals To Develop Its Digital Currency
Meanwhile, the apex bank admitted that the road towards achieving its aim by implementing its digital currency is already filled with challenges, even though the test pilot program would not start until next year. Furthermore, BoK accepted that the CBDC has much more technical glitches that need to be addressed as compared with local currencies.
When the bank was executing the introductory tests, the digital currency test net experienced significant processing speed barriers more than what major local micropayment systems would encounter. Hence, experts deemed it necessary to address this issue in order to facilitate the general adoption of digital currency for real-time use.
An undisclosed official of the South Korean IT firm stated in a news report indicated that it is most likely that the cou try would need more human resources for technical support than it envisions if it hopes to succeed in the implementation of its digital currency.
The expert added that what BoK is planning is a large-scale retail payment settlement project, and as such, it needs large numbers of technical experts from the IT sector. He also pointed out that many technical experts and giant tech firms are currently on the move.