Bank of Korea to launch digital currency simulation in August

·2-min read
On May 6, an employee is demonstrating payment using the cryptocurrency Paycoin (PCI) at the Dalkom Seoul National University of Education Station branch in Seocho-gu, Seoul (Newsis)
On May 6, an employee is demonstrating payment using the cryptocurrency Paycoin (PCI) at the Dalkom Seoul National University of Education Station branch in Seocho-gu, Seoul (Newsis)

Seoul [South Korea], May 25 (ANI/Global Economic): The Bank of Korea is launching a simulation of Central Bank Digital Currency (CBDC) in August. Rather than issuing and commercializing CBDC right away, the idea is to test in advance from CBDC manufacturing to payment in a virtual environment.

To this end, an open bidding for the selection of research service providers will be conducted to complete the first phase of the experiment on the basic functions of CBDC within this year, and based on this, the second phase of the experiment will be completed by next June.

After completing the CBDC Business Process Assessment and External Consulting, BOK made an bidding announcement on the website of the Bank of Korea (www.bok.or.kr) and Nara Market Place of the Public Procurement Service (www.g2b.go.kr) on Monday, that the selection of the CBDC Simulation Study service provider is in process.

The BOK will conclude a contract with a research service provider through technology evaluation and negotiation in July, and plans to start a simulation study in August. From this day, the pre-launch will be made for 5 days, and if there are no disagreements, the main launch will be held for 40 days. The exact schedule will be announced again during this launch.

"This simulation is for research purposes and does is not followed by immediate launch, but currently there is a great need to issue CBDC," said Seong-gwan Yoon, head of the BOK's Digital Currency Research Team, "Basically, in the event of a significant reduction in the proportion of cash use, CBDC must be introduced, and now it is time to prepare for a rapid change in the payment and settlement environment."

The simulation is carried out in two stages. The first step is to verify the technical feasibility of the creation of a distributed ledger-based CBDC simulation environment and its basic functions. Step 2 examines the possibility of applying new technologies related to CBDC expansion functions such as central bank business expansion, offline payment function, digital asset purchase, and personal information protection enhancement technology.

The BOK plans to complete the first phase of the experiment by the end of this year. The second phase of the experiment is to be completed by next June, testing whether the CBDC extended function experiment and the application of personal information protection reinforcement technology are applied.

It will proceed on the basis of general competitive (total) bidding, and the project period is 10 months from the start date with the project budget within 4.96 billion won.

Through this simulation, BOK plans to create a simulation environment for CBDC that operates through the cloud, which is a virtual space, to check the utility of CBDC, and to perform performance tests of all IT systems. (ANI/Global Economic)

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