Blockchain for Banking News

Bank of Korea CBDC bidding becomes 3-way battle

korean won digital currency cbdc

According to multiple reports in the local Korean press, there’s a rumored three-way battle for the main contender in the South Korea central bank digital currency (CBDC) project. In May, the Bank of Korea launched a CBDC bidding process for a blockchain-based simulation project for the digital won. The bidding closed today. A decision is expected by the end of the month with work to start in August.

The central bank required each project to have a single primary operator. As a result, some big names are participating in a support role. The three leading contenders are rumored to be major conglomerate SK C&C, Naver, which jointly owns Line Plus with SoftBank, and social media network Kakao. GroundX is the subsidiary of Kakao that founded the Klaytn public permissioned blockchain and is working with ConsenSys for CBDC. Line Plus unveiled its CBDC solution last week.

In terms of pure blockchain experience, the Klaytn team seems to be the most experienced, although there are likely to be other considerations. 

The two big absentees are Samsung SDS and LG CNS, which are reportedly each collaborating with one of the three contenders to provide advice to other participating companies, according to Aju News. Notably, LG International and LG electronics are on the governing council of Klaytn. But so is SK Networks, a subsidiary of CBDC competitor SK C&C. 

There’s another speculative pointer to LG collaborating with Klaytn. Previously Shinhan Bank independently developed a CBDC project with LG CNS. Subsequently, Shinhan became a member of the governing councils of two public permissioned blockchains, Hedera Hashgraph and Klaytn. The Klaytn announcement was just two weeks ago.

The first simulation stage will run from August to December, trialing basic functionality such as creating, issuance and redemption of the digital won as well as secret keys and wallet functionality. In early 2022 a second phase aims to explore more advanced features such as cross border payments, offline payment, and integration with digital asset systems. This latter phase will also involve programmable money and privacy-enhancing technologies.

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