Bank of Korea prepares for live CBDC transactions with 9 banks in September

The Bank of Korea’s central bank digital currency (CBDC) plans are moving forward with nine participating banks.

The second phase of BOK’s CBDC program is scheduled for September with real-transaction testing, Yonhap News Agency reported on Monday.

“The Bank of Korea will provide the infrastructure for the institutional CBDC, and each bank will conduct its own business using deposit tokens,” a BOK official told YNA. “From the second phase, we will lay the groundwork for commercialization.”

The BOK’s second phase will expand to include a total of nine participating banks, including Gyeongnam Bank and iM Bank. The country’s top three banks, KB Kookmin, Shinhan, Hana, and Woori Financial Group, are also participating in the CBDC project.

“The goal is to create an environment where the won can be traded freely regardless of time or place,” Yonhap quoted the government as saying.

CBDCs are a digital form of blockchain-based fiat currency that are managed by the issuing central bank and considered legal tender. Only a handful of countries have officially introduced a CBDC. Bahamas unveiled one in October 2020, Nigeria in 2021, and Jamaica in 2022, according to the Atlantic Council’s CBDC tracker.