South Korea Embarks on a Revolutionary Digital Currency Journey

In an unprecedented move, the Bank of Korea, alongside financial authorities, is set to conduct a real transaction test of the Central Bank Digital Currency (CBDC) from April to June. This pioneering initiative will involve around 100,000 participants, marking a significant step towards the future of digital currency in South Korea.

How the CBDC Test Will Work

Participants will have the unique opportunity to convert their deposits into deposit tokens, enabling them to make payments at a variety of locations, including convenience stores and bookstores. This initiative, known as Project Han River, is designed to explore the practicality and efficiency of CBDCs in everyday transactions.

Eligibility and Participation

Any South Korean citizen aged 19 or older with a demand deposit account at a participating bank is eligible to apply for this test. However, the total number of participants is capped at 100,000, ensuring a controlled and manageable trial environment.

Benefits and Expectations

The Financial Services Commission highlights the immediate benefits for merchants, including the ability to receive sales proceeds instantly, akin to cash transactions. This test is expected to not only streamline payment processes but also alleviate liquidity management and fee burdens for stores.

Looking Ahead

Following the conclusion of this test, the focus will shift towards exploring additional use cases for CBDCs, such as peer-to-peer transfers, leveraging programming functions to further enhance the digital currency ecosystem.