The central bank of South Korea, the Bank of Korea, is moving towards the technical phase in their concerted effort to pilot a central bank digital currency (CBDC)–the digital won, and will pick a consulting partner a month after completing the review of the first phase reports The Korea Times on Aug 31.
Bank of Korea Seeking for Local Consulting Partner in their CBDC Drive
Details of their preferred local consulting partner will be released later today and those willing will be an integral part of helping the BOK design the CBDC’s architecture based on the test results obtained from the first phase to speed up the launch of the pilot scheduled for late 2021.
Specifically, the architecture entails the whole CBDC system structure and includes details such as applications, data management, and importantly, security.
“The BOK will team up with a consulting partner to map out the overall work process and architecture to operate the digital currency system, and both sides will also come up with specific action plans to successfully establish the pilot system on time.”
Collaboration to Fast-Track the Digital Won Rollout
This comes roughly three months after the BOK established a legal advisory committee to look into possible regulatory obstacles that may slow down their CBDC drive.
As BTCManager reported, the team consists of six members and will advise the central bank through to May 2021. All of them are experts in commercial law and Fintech.
They will use their expertise to advise the central bank on which laws to revise and which to redact “for smooth progress in the BOK’s possible issuance of digital currency.”
The digital won will use an IT system in the early stage and later deploy a distributed ledger technology-based solution during the piloting stage.
Coronavirus Forcing Fiat Digitization
CBDCs appear inevitable as economies evolve. To modernize and even upgrade their rigid systems, central banks are now merging emerging technologies and would soon integrate distributed ledger technology (DLT) for better efficacy and implementation of monetary policy.
With the Coronavirus pandemic catalyzing digitization and migration away from hard cash, central banks of leading economies like the U.S. are in different stages of research with some like the PBoC galloping ahead, piloting their the digital yuan.
As BTCManager previously reported, more banks are keen on CBDC. The De Nederlandsche Bank (DNB) plans to lead this effort in Europe.