The Bank of Korea shortlisted three regions for potential CBDC testing next year, and the country’s capital Seoul was not on the list.
Jeju, Busan, and Incheon Make the Cut
On July 31, 2023, a local South Korean media outlet shared updates regarding preparations for the launch of the central bank digital currency (CBDC) in South Korea. The government has been working on the South Korean digital won since at least 2020 and has finally scheduled its pilot for the next year.
According to the report, the Bank of Korea has chosen Jeju, Busan, and Incheon as candidates for the “private target CBDC test bed” in collaboration with commercial banks. In other words, one of these three regions will eventually be selected to test the public distribution process and the use of the CBDC as a means of payment.
So far, Jeju has the highest chances of becoming the CBDC pilot site, as one of the bank officials explained:
“In the case of Busan, the number of eligible citizens is so large that the Bank of Korea is burdened in many ways, so the opinion was greatly inclined to Jeju, which has the next largest population.”
It was also mentioned that the CBDC testing will be similar to the issuance and distribution structure of the current local currencies. South Korea introduced local currencies as alternative currencies issued by local governments to revitalize the local economies during the COVID-19 pandemic.
All of the three suggested regions for the CBDC pilot are currently issuing and distributing their own local currencies (“Tamranjeon,” “Dongbaekjeon,” and “Incheon e-Eum”). This might be the reason why the Bank of Korea narrowed down these regions and bypassed Seoul.
A commercial bank official said, “The CBDC electronic wallet (app) will allow not only local residents but also many unspecified civilians such as tourists to open. We are in contact with distribution companies such as large supermarkets.”
Obstacles for the South Korean CBDC Launch
The report also revealed that unlike existing local c
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Author: Olga Krasilnikova
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