Bank of Korea to Launch Live CBDC Transactions with Nine Banks in September

Major South Korean banks join the Bank of Korea in a significant CBDC pilot program.

The Bank of Korea (BOK) is set to launch the second phase of its central bank digital currency (CBDC) pilot program in September, marking a significant step forward in its digital currency initiatives. This phase will involve live transactions among nine prominent banks, including Gyeongnam Bank, iM Bank, and major players like KB Kookmin, Shinhan, Hana, and Woori Financial Group.

According to a BOK official, the central bank will provide the necessary infrastructure for this pilot, while the participating banks will manage their operations using deposit tokens. This initiative aims to lay the groundwork for the eventual commercialization of a digital won.

The CBDC pilot comes as South Korean banks are also exploring their own stablecoin frameworks, with Hana Bank reportedly developing systems for a won-backed stablecoin that incorporates features for issuance, redemption, and compliance with anti-money laundering regulations.

In addition to CBDC developments, the South Korean government plans to amend legislation to classify cryptocurrencies as national assets, further integrating blockchain technology into the public finance system. This move aligns with the Bank of Korea's ongoing exploration of digital currency solutions, as only a few countries have fully implemented CBDCs to date.

“The Bank of Korea will supply the infrastructure for the institutional CBDC, while each bank will manage its own operations using deposit tokens,” stated a BOK official.