Enters 2nd Phase of CBDC Plan

The Bank of Korea has entered the second phase of its central bank digital currency (CBDC) circulation plan.

The Bank of Korea completed its groundwork for central bank digital currency (CBDC) circulation and entered the second phase for process analysis and external consulting in July this year. In the third phase, the bank will test the operation of its CBDC system in a limited environment in which it is in charge of issuance and redemption and the private sector is in charge of circulation, that is, the way cash flows.

In the consulting phase, the central bank is designing CBDC-related processes and forms and working on detailed plans for the test scheduled for next year. During the test operation, the central bank will indirectly circulate the digital currency via financial institutions. This is because the central bank has its own limitations in directly issuing and circulating the currency in relation to individuals and enterprises.
 

The test operation is scheduled to be carried out throughout next year. In January this year, the central banks of Sweden, Canada, the United Kingdom, Japan, the European Union and Switzerland formed a CBDC research group.

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