The Bank of Korea has announced that, since being started back in August of 2021, the first phase of mock testing of their central bank digital currency has been successfully completed.
With this, South Korea has become one of the leading crypto-compliant nations. In addition, the country has announced plans to become the world-wide leader in the metaverse as well. At the moment, China is leading the CBDC field, however, many European and Asian countries have notably excelleted their development processes in order to catch up and even pass China in the digital currency race.
According to YNA news, the South Korean central bank finished the first phase of its CBDC trial in December of 2021. This stage of the digital currency pilot involved some of the sovereign digital currency’s basic functions, such as issuance and distribution.
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The second phase, which is already underway, is expected to test real-world functionalities of the central bank digital currency (CBDC), which include cross-border remittance, and retail and offline payments.
The Bank of Korea stated:
"We will confirm the possibility of operating various functions, such as offline settlements, and the application of new technologies, such as one intended to strengthen privacy protection during the second phase of the test."
The Bank of Korea is planning to onboard financial institutions during the second stage of testing. This step is to assure that the BOK-issued digital currency would have a focus on user privacy, unlike what China is doing with the digital yuan.
Once the second phase is completed, according to plans, by June of 2022, the central bank is expecting to outline plans of an official launch and commercialization.
With these developments, South Korea has successfully become one of the few countries worldwide to successfully mock test their own CBDC. According to Atlantic Council, this makes South Korea one of only 14 countries to successfully reach and run a trial phase of their digital currency, while 91 countries in total have been reported to be officially working on their own sovereign digital currency.
