South Korea to Hand Out Digital Won for Large-Scale Test in 2021

The Bank of Korea (BOK) announced on October 7 that it will be distributing its CBDC, the digital won, to the public in 2021 as part of its 22-month pilot test, according to The Korea Herald. This is the final phase of the pilot trial phase, after the first design and conceptualization phase ended in July. Currently, the second phase of research and analysis is ongoing.

With the third phase, the bank will explore real-life usage of the digital won after distributing and circulating it. The BOK intends to record transactions with blockchain technology. However, it still remains to be seen if the bank will truly launch a digital won for use in South Korea as it previously stated that this 22-month exercise is simply a trial and there are currently no plans to launch a CBDC.

A six-person team comprising attorneys, academics and a bank representative has been formed to study and analyse the legal repercussions of launching the digital won. Announced back in June, the bank is carrying out this extended trial project to ready itself for a CBDC launch should the opportunity arise in the future.

In Asia, the BOK is the furthest along CBDC development after China and Cambodia. China in particular recently released its findings from the first round of tests for its digital yuan, of which spanned four cities and resulted in 6,700 use cases. It is intending to expand trials to other cities and provinces in the country, and aims to use the digital yuan in the Beijing Winter Olympics in 2022.

You may also want to read: Preliminary Results on China’s Digital Yuan Pilot Phase Revealed

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