The Bank of Korea will invest about 5 billion won to launch simulation studies of the Central Bank Digital Currency (CBDC) in August.
CBDC is a new electronic form of currency issued by the central bank separately balances in traditional reserve or settlement accounts in the central bank.
Unlike Bitcoin, which keeps changing prices, CBDC is stable without volatility, so it can be used as a means of payment like cash.
With the recent cryptocurrency craze centered on Bitcoin, central banks in major countries are starting to research and introduce CBDCs in earnest.
The Bank of Korea has been conducting CBDC research since last year in preparation for changes in the future payment environment called 'cashless society'. The simulation study will be an experiment from CBDC manufacturing to payment in virtual environments rather than commercializing them immediately.
The Bank of Korea plans to complete 'CBDC Business Process Analysis and External Consulting' in March this year. Based on this, the Bank of Korea and Korea Online E-Production System will announce bids to select service providers for 'CBDC Simulation Research'.
The Bank of Korea plans to complete the first phase experiment of the CBDC's basic function by the end of this year and conduct the second phase experiment on payments using CBDC, remittances between countries, and applications of privacy technologies by June next year.
Meanwhile, IT companies such as Naver, Kakao, and LG CNS have already expressed their intention to participate in bidding.
