South Korea Plans to Test CBDC with 100,000 Citizens in 2024

By: Eliza Bennet

The Bank of Korea (BOK) plans to invite 100,000 citizens to participate in a pilot Central Bank Digital Currency (CBDC) scheme in 2024. The participants will be limited to using the CBDC for payment purposes only, without an option to store, exchange, or send it to other users. The pilot program will run for three months starting around September to October, aiming to evaluate the effectiveness and feasibility of issuing and distributing the currency.

The CBDC test is seen as a potential solution to problems with existing government-issued grant systems, such as those experienced during the COVID-19 pandemic, or with childcare vouchers. The BOK will also collaborate with the Korea Exchange to integrate the digital currency into a simulation system for carbon emissions trading, testing the feasibility of delivery versus payment transactions. This initiative coincides with a visit to Seoul by Agustin Carstens, general manager of the Bank for International Settlements (BIS), who has referred to the Korean CBDC project as the digital won.

In addition to its support for the Korean project, the BIS is also involved in other CBDC projects globally, supporting central banks and monetary authorities across the globe, including in Switzerland, China, Hong Kong, Thailand, and United Arab Emirates.