South Korea’s CBDC Will Begin Distribution Phase Next Year

South Korea’s CBDC will begin distribution phase next year. The South Korean central bank announced today that it will start the distribution phase of its central bank digital currency, or CBDC, pilot scheme next year.

According to an article in local media outlet The Korea Herald, this sees the digital won enter circulation, with financial institutions getting involved in the distribution and transactions recorded to the blockchain.

Bank of Korea’s 22-month CBDC pilot scheme launched in March of this year. Distribution is the third and final phase of the program and would seem to be on schedule with the roadmap presented at the scheme’s launch.

Phase one was completed in July and the CBDC specifications and design were identified, along with a review of the technologies required for the project to be implemented.

The second phase presently underway, focuses on an analysis of the business and related processes. This is scheduled to run until the end of the 2020, leading to the final build and distribution phase.

The Bank of Korea maintains, amid strong progress on the pilot programme, that it does not currently have verified plans to launch a CBDC once it is completed. Instead, it would like to be completely prepared to take certain steps if the market conditions were to change unexpectedly, either nationally or internationally.

This may be the case once China’s persistently “just-around-the-corner” digital yuan finally launches, with reports suggesting that South Korean merchants would be open to accepting this as a payment method.

[image: Timothy Ries]

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