South Korea's central bank will conduct a CBDC pilot in 2024

The Bank of Korea (BOK) plans to launch a central bank digital currency (CBDC) pilot project in the fourth quarter of 2024.

This was reported by local media with reference to representatives of the regulator.

According to the press, the program will be jointly managed by three agencies - the BOK, the Financial Services Commission and the Financial Conduct Authority.

The issue will be carried out by commercial banks. At the initial stage, CBDC can be used exclusively for the purchase of retail goods, without specifying the categories of the latter.

100,000 residents, about 0.2% of the total population of South Korea, will be involved in the project. It should be noted that at the end of July 2023, the media announced that three cities had been selected for the pilot - Jeju, Busan and Incheon. In this case, the regulator is probably inclined to the first option.

The press noted that the Central Bank is considering CBDC as a solution to the problem of distributing social benefits. These include, for example, vouchers for certain categories of the population.

Previously, the department announced the preparation of the project in October 2023. At the same time, information appeared that the authorities were interested in the possible use of CBDC as a settlement asset for tokenized deposits.

The pilot is expected to take place in the fourth quarter of 2024 and will last three months. Based on its results, the BOK will decide on the feasibility of implementing such a system.