The Bank of Korea has chosen three regions, excluding Seoul, to pilot its Central Bank Digital Currency(CBDC). On July 31st, the bank confirmed these regions as candidates for the “private target CBDC test bed.”
The bank plans to select one of these regions and conduct closed tests of the CBDC while experimenting with payments and distribution at a public level. Additionally, they aim to secure franchises capable of accepting CBDC payments.
An official at the bank stated that the CBDC electronic wallet app will be accessible to both local residents and tourists.
The Bank of Korea explained that the regional closed tests of the CBDC will be similar to the issuance and distribution of the current local currency scheme in various regions of South Korea.
During the COVID-19 pandemic, Jeju, Busan, and Incheon introduced their own local currency schemes as a basic income and relief payment solution, issuing “Tamranjeon,” “Dongbaekjeon,” and “Incheon e-Eum,” respectively.
An official from a commercial bank in Korea reported that Busan’s large number of eligible citizens burdened the Bank of Korea, leading them to be “greatly inclined” towards choosing Jeju, which has the second-largest population.
The local report highlighted that the local currency scheme presents fewer “technical barriers” to overcome compared to CBDCs.
Several banks in South Korea have released information stating that they are researching stablecoins as CBDC alternatives to enhance efficiency.