Bank of Korea (BOK), the central bank of South Korea, will soon join the list of those central banks that are successfully testing their respective central bank digital currencies (CBDCs) as the bank has now officially announced to begin the testing of its centralized digital currency later this year.
Simulation Experiments Of CBDC
The central bank of South Korea seems to be escalating its effort for rolling out its own central bank digital currency as it has announced to make further progress regarding the introduction of its CBDC. South Korean bank has announced in its official report that it will conduct simulation experiments of its centralized digital currency in the second half (H2) of the present year.
The Bank of Korea is looking into the possibility of launching a central bank digital currency for a longer period of time. And so, for now, we have seen various government officials talking about the implementation of digital currency.
Lee Ju-yeol, the governor of the Bank of Korea, said back in the month of February this year that they are making particular progress in the development of their central bank digital currency. He also said that it is better for them to get the development of their CBDC right rather than doing it fast. Adding more to his comments, he stated that the country needs to follow the same cautionary approach which the United States of America has adopted.
At the beginning of the current year, the South Korean central bank clarified its stance regarding central bank digital currencies and said that they are not cryptocurrencies. Rather the bank referred to them as fiat currencies. The bank said that CBDCs could be regarded as the fiat currencies’ digitalized version as well, which utilizes blockchain technology.
BOK’s governor also talked about the development that China’s central bank, the People’s Bank of China (PBoC), is making for its central bank digital currency. He asserted that the Digital Yuan of China is not going to have any effect on South Korea. Some analysts from across the world have predicted that the central bank digital currency of China is likely to dominate the worldwide economy. While on the other hand, some analysts do not agree with such claims.
Along with China and South Korea, many other central banks are also currently working on the development of their respective CBDCs, including Japan, Russia, etc.