Bank of Korea Eyes Three Cities for Pioneering CBDC Pilot

South Korea's central bank has chosen three possible regions for its Central Bank Digital Currency (CBDC) pilot. Interestingly, the country's bustling capital, Seoul, isn't on the list.

The Bank of Korea has hinted at three potential locales for their "private target CBDC test bed." Incheon, Busan, and the island of Jeju are the chosen contenders, as reported by a local South Korean media source on July 31st.

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However, the bank's CBDC endeavors do not end with the pilot. The Bank of Korea plans on broadening its horizons by testing public-level payments and securing franchises open to CBDC payments.

Speaking on the anticipated project, the bank representative stated:

The CBDC electronic wallet app will allow not only local residents but also many civilians, such as tourists to <partake>.

The Bank of Korea aims to implement the CBDC's regional closed testing on the existing local currency scheme employed across diverse South Korean regions.

The local currency mechanism was initiated as a solution to basic income and relief payments during the COVID-19 pandemic. Interestingly, all three candidate cities for the pilot scheme, Jeju, Busan, and Incheon, have already issued and disbursed their local currencies.

Korean commercial bank official highlighted that Busan has a vast number of eligible citizens, creating a significant burden on the Bank of Korea. Consequently, Jeju, with the second-highest population, emerged as the more plausible choice.

The Bank of Korea has chosen to pilot its CBDC in one of three cities, with Seoul noticeably absent from the list. As the world progressively embraces digital currencies, the success of this pilot could potentially influence the trajectory of global monetary systems.

Earlier in July, the Bank of Korea disclosed its achievements and future prospects for the nation's payment systems, including plans to adopt a central bank digital currency (CBDC) and lay down regulations for stablecoins.