South Korea is now finally has taken the step to initiate the pilot program to test digital won. Earlier this morning on Monday, this news breakout in the market via Reuters that Shinhan Bank, known to be the largest banking network of South Korea, has developed a pilot program to test the potentials of the central bank digital currency (CBDC) for the sake of practical implementation of the digital won. Reuters reported that the Bank of Korea (BOK) is only a few steps behind to validate the CBDC by means of experimenting with the pilot program and inculcate it after the success of the planned pilot program.
As reported on 23rd of May 2021, Shinhan’s officials are focusing on the aforementioned pilot program to decide whether to proceed with issuing the digital won or to further investigate before inculcating it into the financial institutions.
It is being said that for use and distribution of digital won. There is a need for the intermediary agency for effective implementation, and for such purposes, the Bank of Korea (BOK) already conducted research for the issuance of the CBDC, which was published for the concerned clienteles in the February of 2021. This platform divides the issuance of central bank digital currency (CBDC) into the support funds in case of any disaster for government and businesses and individuals with the general funds.
The report states that the pilot program will be implemented according to the plan, as initially, the Bank of Korea (BOK) will conduct the tests to simulate the operation of internal banking by opening saving accounts and by means of transferring funds and most importantly, this program will also work on the practicality of transactions by means of mobiles or cellular devices for the sake of payment solutions. Right now, the Bank of Korea (BOK) is looking forward to collaborating with a reliable partner to test the digital won.
It is well-acknowledged that during the last month, March 2021, Shinhan Bank, based in Seoul, developed the pilot program, which is now entering the practical phase as BOK now seems to be in form. The aforementioned program was a bit vague in respect to whether or not the Central Bank opted to distribute the CBDC via intermediaries, but now this pilot program seems to be entering into the practical phase as the Bank of Korea is now looking forward to initiating this pilot program by means of circulating digital won.
BOK’s official shared that cash payment has lost its worth and declining day by day, so now authorities have concluded that it is the right time to advance the payment solution and to opt and start dealing in the digital currency as few other prominent countries like Sweden and China are also following the same trend.