South Korea’s Bank of Korea (BOK) will launch a large-scale pilot test for its central bank digital currency (CBDC), starting April 1. The test is aimed at evaluating its use in everyday transactions. As part of this initiative, the bank will conduct trials using digital tokens that are backed by bank deposits, allowing consumers to make payments both online and in physical stores.
South Korea’s CBDC Test
Up to 100,000 participants will be involved in the trial, which will run until the end of June. Consumers will be able to use these digital tokens to purchase goods and services at a range of locations, including 7-Eleven convenience stores, Kyobo Bookstore branches, Ediya Coffee outlets, and the Hyundai Home Shopping website.
Participants can convert their bank deposits into digital tokens via the mobile apps of seven major banks, such as Kookmin Bank, Shinhan Bank, and Hana Bank. The digital tokens will be capped at a maximum value of 5 million won (approximately $3,400) for use during the test.
The project, named Project Hangang, is being carried out in collaboration with the Financial Services Commission (FSC), the Financial Supervisory Service (FSS), and other relevant authorities.
According to a BOK official, this token-based payment system is expected to help lower transaction fees for partner stores while enhancing convenience for consumers.
Following the completion of this usability test, the BOK plans to expand its digital currency trials, exploring options for person-to-person transfers and digital vouchers.
Also Read: South Korea: Not Considering Including Bitcoin in Foreign Exchange Reserves
