Today the Bank of Korea shared details about its planned wholesale CBDC trials. It will involve two sets of digital won experiments. In one test, banks will issue tokenized deposits as programmable vouchers. Banks will use the wholesale central bank digital currency (CBDC) for interbank settlement. These trials will involve up to 100,000 people and plan to start in September or October next year.
A second set of tests is for a wholesale CBDC to settle financial transactions. The Korea Exchange will create a simulated carbon credit trading market. On the CBDC platform, the central bank will issue CBDC to specific banks in exchange for 100% collateral. The CBDC will then be bridged onto the carbon credit platform, where it will be used for settlement. While banks will participate, they will not be expected to operate nodes.
Circling back to the first test for vouchers, if this sounds a little similar to Singapore’s purpose bound money, that’s because the Monetary Authority of Singapore (MAS) and the Bank of Korea have been working together. The Bank of Korea contributed to the MAS purpose bound money paper.
Article continues …
Want the full story? Pro subscribers get complete articles, exclusive industry analysis, and early access to legislative updates that keep you ahead of the competition. Join the professionals who are choosing deeper insights over surface level news.
