South Korea central bank seeks partner to build its CBDC architecture

Getting your Trinity Audio player ready...

South Korea’s push for a central bank digital currency (CBDC) is advancing to the next stage as the country’s central bank seeks to start a pilot project. The Bank of Korea (BOK) is now seeking a firm to partner with on the CBDC’s second phase which involves building the digital currency infrastructure.

BOK recently concluded its first phase in its CBDC development journey which involved extensive research regarding the feasibility of a digital won. It’s now embarking on the development of the infrastructure of the digital currency, including its issuance and distribution, applications, security and data management.

The bank is now seeking a consulting firm to partner with in the new phase, according to an announcement on its site. Interested companies are requested to submit their applications to the bank.

The selected firm will work with the BOK to build the CBDC as it eyes a 2021 launch date.

An official from the bank told local English paper The Korea Times, “The BOK will team up with a consulting partner to map out the overall work process and architecture to operate the digital currency system, and both sides will also come up with specific action plans to successfully establish the pilot system on time.”

While the BOK has been stepping up its CBDC efforts, it has insisted that it’s in no hurry to launch a digital won. The bank believes that the era of the CBDC, though eagerly awaited, isn’t here yet and that most central banks are currently only conducting experiments and pilot tests.

BOK’s CBDC push has been a big turnaround from its stance last year when it downplayed the need for a CBDC in the country. “Our view is that most Korean people do not feel difficulty in making transactions with current payment methods. We are not in a stance that the central bank should hurriedly issue a similar public digital currency like some countries,” a BOK official told the Korean news outlet.

However, the bank has now become one of the leaders in CBDC advancements globally. The BOK’s enthusiasm towards a digital won seems to be finally catching up to the citizens’ love for digital currencies, with the East Asian being one of the world’s largest markets.

To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.