The South Korean central bank announced on Oct. 7 that it will begin the distribution phase of its central bank digital currency, or CBDC, pilot scheme next year, according to a report by local media outlet The Korea Times.
This will see the Bank of Korea test distribution of the digital won in a virtual environment, although a BoK official stressed that there would be no third party involvement at this point, adding:
“The CBDC will be issued and circulated in the virtual world and we are going to test a number of transaction scenarios under a variety of circumstances.”
As Cointelegraph reported, BoK’s 22-month CBDC pilot scheme launched in March of this year. Distribution is the third and final phase of the program and would seem to be on schedule with the roadmap presented at the scheme’s launch.
Phase one was completed in July, and defined the requirements and design of the CBDC along with a review of the technology needed to implement the project.
The second phase is currently underway, and is focused on an analysis of the business and related processes. This is scheduled to run until the end of the 2020, leading to the final build and distribution phase.
Despite solid progress on the pilot program, the Bank of Korea maintains that it has no currently confirmed plans to launch a CBDC once it completes. Rather, it wishes to be fully prepared to take such measures if market conditions, either nationally or globally, were to change suddenly.
This may be the case once China’s persistently “just-around-the-corner” digital yuan finally launches, with reports suggesting that South Korean merchants would be open to accepting this as a payment method.
UPDATE Oct. 7, 2020 11:30AM EST: This article has been amended to reflect that only the BoK will be involved with the ‘virtual’ distribution.