The Bank of Korea concluded its first phase of testing a central bank digital currency in a simulated environment in December 2021, according to a report published Monday.
The first phase, launched in April 2020, tested the basic functions of how a digital won would work in real life, looking at manufacturing, issuing and distribution. Last July, it named Ground X, a blockchain subsidiary of South Korea-based tech giant Kakao Corp., its preferred supplier for the CBDC program.
BOK will now move on to phase two of the program, which will include testing offline payments and privacy data technologies. The projected date of completion for phase two is June 2022, after which it will do more testing in cooperation with existing financial institutions. The Bank of Korea has also made it clear in a separate report that much more testing in a real environment is required to move forward.
While South Korea is moving slowly but surely, China is going full steam ahead with its digital yuan, or e-CNY. China’s CBDC efforts have been around since 2014, and it most recently launched a pilot wallet app for its digital yuan.
Nigeria launched its digital currency, e-Naira, in October 2021, with 500 million e-Naira minted, an estimated worth of $1.2 billion. The UAE and Saudi Arabia launched a bilateral CBDC pilot program in 2019 and in February 2021, in conjunction with China, Hong Kong and Thailand, the two countries launched a “Multiple Central Bank Digital Currency” bridge to test foreign currency payments.
According to findings by the Atlantic Council’s CBDC tracker, at least 87 countries are exploring the creation and use of a CBDC, with nine countries who have fully launched one.
In a report published last week, the U.S. Federal Reserve is also considering launching a CBDC, but is holding off while waiting for public opinion.