Central Bank of South Korea to Test CBDC in The Second Half of 2021

The Central Bank of South Korea will conduct simulation experiments for its CBDC in the second half of 2021, according to information on the official website. This marks another country that is making efforts to test and launch the CBDC. Bank of Korea Governor Lee Ju-yeol said in February 2021 that it was better to get it right than fast. Meanwhile, Shinhan Bank has created a platform that could potentially be used for CBDC.

The Bank of Korea also clarified earlier this year that CBDCs are fiat currencies, not virtual currencies. In other words, they are simply digital versions of fiat currencies based on distributed ledger technology. This has served as one of the main criticisms of CBDCs, as they have the same disadvantages as fiat currencies.

Several countries are now actively pursuing their CBDC projects and 2021 will be a landmark year. These countries include China, Russia and Japan, which are investing huge resources in digitization. China is undoubtedly the leader here. It has already conducted several pilot programs that have been well received. Only two countries have officially launched CBDC, the Bahamas and Cambodia. In a recent report, PwC ranked these countries' CBDCs as the best.

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