South Korea, announced on Monday, the launch of a pilot program to help govern and regulate the use of digital currencies in the country.
The project, headed by the Bank of Korea, commenced last month and will run for 22 months. Within this period, technical and legal issues surrounding the project will be experimented and scrutinized to help fine-tune the country’s Central Bank Digital Currency (CBDC) operations.
The technical aspect would address the currency’s design, mode of operation and implementation. For the legal aspect, several related issues including a review of the Bank of Korea Act to possibly suit CBDC operations will be discussed.
The Bank of Korea interestingly has no plans to release a national digital currency anytime soon. It believes that there is currently no need, because of a few factors including the current continued demand for cash.
Several central banks across the globe are looking to integrate cryptocurrency, via CBDCs, into their financial systems. The Bank of Korea commenced plans for a CBDC in 2019 with a research team, using other countries’ digital currency operations as their case study.
KB Kookmin, South Korea’s largest bank, recently launched a crypto custody service.