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The Central Bank of Korea has just announced that it is ready for the entire test program of the central bank’s digital currency in June of this year.
Recently, the central bank of Korea (BoK) announced that it had completed the first phase of a two-part trial for a CBDC last December. Currently, this project is entering its second phase.
Although Korea completed the first phase of testing CBDC, the central bank’s cryptocurrency last December, it was not until January 24 that the media – The Korea Herald – officially reported it. believe.
During this period, the central bank tested the most basic functions of the financial product, for example: issuance, distribution in a cloud-based virtual environment, and production.
An ongoing second phase will look at the technology required for its actual employment. The wiring and offline payments as well as digital asset trading acquired in December will now be tested.
The bank expects to complete the project by June this year. They then plan to discuss the actual launch and commercialization of the CBDC with the Korean authorities.
Besides, this organization is also planning to expand the scope of testing by cooperating with monetary institutions. Before that, many central banks around the globe such as: People’s Bank of China, Bank Negara Malaysia, Central Bank of Nigeria, etc. have become part of the competition to issue their own CBDCs.
Besides, the Bank of Korea has warned that this financial product will have its own negative sides. These can be fully disclosed once the CBDC has been researched and tested.
In addition, the organization also doubts CBDC can completely replace cash rather than savings in banks as most major economies believe.
Specifically, the Central Bank of Korea commented:
“We are testing a range of measures that can mitigate the negative impact of cryptocurrencies on financial stability,”
Pros and cons of CBDC – the central bank’s cryptocurrency
Although every country wishes to be able to issue its own central bank cryptocurrency, the reality of CBDCs still raises certain concerns.
Because, this cryptocurrency has both pros and cons, most of which are unclear benefits.
Many experts believe that the hidden qualities of a CBDC should be thoroughly examined before taking action. The Federal Reserve is a proponent of that approach.
Previously, the US central bank said it was better “rather than before” to launch a central bank digital currency.
A few days ago, the Fed outlined that the currency product can have controversial aspects. It can promote payment options between individuals, businesses and even countries.
On the other hand, a CBDC would be against people’s liberties and might not be beneficial to the financial stability of the United States.
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