The South Korean Central Bank successfully completed the first phase of its mock central bank digital currency (CBDC) test, which began in August 2021.
South Korea’s central bank said the first phase of its mock CBDC trial ended in December. While the second phase is currently underway, reported the news portal YNA News. The first phase of the mock test involved some of the basic functions of the CBDC, such as the distribution and issuance of the asset.
The second pilot phase of the CBDC would test new real-world functionality such as cross-border remittances, retailer payments, and offline payments.
“We will confirm the possibility of operating various functions, such as offline agreements and the application of new technologies, such as the one aimed at strengthening privacy protection during the second phase of the test.” declared the Bank.
The South Korean Central Bank is also looking to bring in financial institutions for the second phase. Pretty similar to what China is currently doing with its digital yuan. However, unlike China, the digital currency issued by the Central Bank would also focus on the privacy of its users.
The second phase is expected to be completed in June 2022, after which the South Korean Central Bank plans to finalize the official launch of its CBDC.
CBDCs begin to gain prominence
Currently, South Korea has become one of the top cryptocurrency-friendly nations in recent years. And he recently revealed his plans to become a world leader in the metaverse as well. While China is currently at the forefront of CBDCs, many other European and Asian countries have accelerated their development plans to keep pace with it.
Recently, Iran advertisement that it is possible that it will start a pilot plan for a Central Bank Digital Currency (CBDC). Central Bank of Iran deputy governor of technology Mehran Moharamian said that the bank sees crypto as a solution to address ongoing inconsistencies in the traditional market.
Currently, there are 91 nations that are working on sovereign Central Bank digital currencies. While only a handful of them have reached the pilot phase. China is currently at the forefront, having completed the development of its CBDC in 2019 and is currently testing it in different provinces and retail sectors.
In addition, France and Switzerland have also carried out several cross-border pilot projects. South Korea, Japan and Russia are expected to carry out final tests later this year. While the United States is still in the discussion phase. According to him tracker of the Atlantic Council CBDC, 9 countries have already implemented a CBDC, 14 are in the pilot phase, 16 are in the development phase, 41 nations are still in the research phase, and two nations have canceled their plans for a CBDC.