According to local media sources, affiliates of South Korea’s two major internet corporations are among the favorites to handle the country’s impending central bank digital currency (CBDC) pilot.
According to reports, Naver and Kakao subsidiaries have submitted plans to manage the 10-month blockchain pilot program, which will try to simulate the possibility of a central bank digital currency.
Kakao’s blockchain subsidiary Ground X and the Naver-affiliated Line Plus submitted bids to the Bank of Korea. The central bank is currently narrowing the field, with plans to select the successful bidder to conduct the pilot scheme soon. With a budget of 4.96 billion won ($4.3 million), the pilot is expected to run through June 2022.
The CBDC, also known as the digital won, will be tested in a virtual environment using distributed ledger technology as part of the pilot program. In addition, the bank will use the pilot program to investigate several CBDC uses, including issuance, redemption, electronic payments and settlement, digital media, and intellectual rights management.
The Bank of Korea began the bidding process for the contract in May, looking for a tech partner to help them investigate the benefits and implications of launching a CBDC. The Bank of Korea, like other central banks across the world, has been interested in researching a central bank digital currency based on blockchain technology.
The central bank initially declared its plans to introduce a digital currency in South Korea in February when it issued a book on central bank digital currencies.
With a decision on the horizon, it appears like South Korea is on the verge of moving forward with its plan to create a central bank digital currency.