South Korea’s plans for its experimental central bank digital currency (CBDC) project also includes efforts to contribute to the expanding body of knowledge dedicated to sovereign digital currencies. Meanwhile, with many CBDC pursuits cropping up across the globe, some commentators say cross-compatibility will determine which national digital currencies will succeed.
BOK Publishes CBDC Book
According to the English service of South Korean media outlet Arirang, the Bank of Korea (BOK) has published a book detailing the legal issues associated with CBDCs. As part of the book, the country’s central bank argued for significant legislative amendments that will create an enabling environment for sovereign digital currencies to flourish.
The book publication is coming amid plans by the BOK to run CBDC experiments in 2021. Indeed as previously reported by BTCManager, the country’s central bank announced back in October 2020 that it was nearing the final stages of its CBDC pilot test.
Commenting on its CBDC plans for the year, the BOK remarked:
“The Bank of Korea is conducting an analysis of operational procedures for a CBDC rollout, and outside consulting is also underway. This year, we’re going to launch a CBDC pilot system in a virtual environment, and run tests to verify its functions and safety.”
For the BOK, transitioning from cash to digital currency could offer some significant economic incentives including a positive gross domestic product (GDP) growth as high as three percent, adding: “Digitalization of currency would accelerate currency circulation and reduce maintenance costs. It would also be an efficient way to realize negative interest rates, overall enhancing the government’s monetary management.”
With China already making significant advances with its own digital currency electronic payment, the BOK is looking to not get left behind. However, its plans are only geared towards experimental exploration of CBDC protocols and not the creation of an actual digital Won.
China’s CBDC testing continues to gather steam will multiple airdrops occurring in different cities. India is reportedly set to introduce a new bill for CBDCs while banning private cryptocurrencies.
In Europe, Ukraine partnered with Stellar back in January to develop its own CBDC while Turkey’s central bank says it is hopeful to conduct a sovereign digital currency pilot in 2021.
CBDCs are yet to make a splash on the African continent but in North America, the coronavirus pandemic is reportedly forcing Canada to fast-track its digital currency research programs.