Shinhan Bank is hoping to collaborate with the central bank with the blockchain-powered platform, in order to assist with the development and rollout of a central bank digital currency in South Korea.
The Bank of Korea has said central bank digital currencies are not virtual assets, but an alternative form of fiat currency, requiring some legal changes ahead of any future national rollout.
The Bank of Korea will begin pilot transactions in 2021 to determine the feasibility of rolling out a digital currency system across Korea.
Bank of Korea is looking for a firm to partner with on the CBDC’s second phase which involves building the infrastructure.
Bank of Korea is seeking to step up its digitalization efforts with the launch of a new department that will focus on blockchain and artificial intelligence.
The panel will decide which laws may need to be amended to guarantee a smooth launch of a South Korean CBDC.
Developments in payment settlements were pushing central banks towards taking a more serious look at digital currencies.
The South Korean central bank has reportedly been working on a pilot for a system that would issue and record bonds on a blockchain.
A report by the Bank of Korea pointed out that introducing a CBDC would lead to a decline in commercial banks’ demand deposits, causing a cash shortfall.
The Bank of Korea is launching a pilot program that will explore the feasibility of a cash-free society, and is considering cryptocurrency and blockchain technology to make it happen.
