BOK to conduct mock test on functionality of digital currency

Publish May 25, 2021
banking

Seoul, May 24 (BNA): The Bank of Korea (BOK) said Monday it plans to carry out a mock test on the functionality of a central bank-issued digital currency (CBDC), as the bank seeks to study the potential introduction of a new cryptocurrency.

The BOK said it plans to pick an operator of the mock test via bidding to check how CBDC functions in a virtual space. The test is expected to start in August and run until June next year, according to South Korean News Agency (Yonhap).

The central bank will mainly check whether the CBDC can serve as a currency for settlement and remittance and whether holders of CBDC can use it to buy goods and services.

In March last year, the BOK began reviewing legal and technological issues to check its capabilities for the possible issuance of such a currency under its three-step scheme.

The BOK has said the planned test does not necessarily mean a step toward the actual issuance of a cryptocurrency, but the bank is making necessary preparations 'just in case.'

Global central banks are accelerating their research on digital currencies to brace for a fall in demand for cash and the emergence of cryptocurrencies in the private sector. The central banks in China and Sweden are aggressively preparing to issue CBDCs.

bna

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