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BOK to test-run circulation of digital currency next year

All News 09:41 October 07, 2020

SEOUL, Oct. 7 (Yonhap) -- The Bank of Korea (BOK) said Wednesday it plans to test-run issuing and circulating a central bank-issued digital currency (CBDC) next year, as the bank will launch a pilot program to study the potential introduction of a new cryptocurrency.

In March this year, the BOK began reviewing legal and technological issues to check its capabilities for the possible issuance of such a currency under its three-step scheme.

The bank plans to establish and activate a pilot program for a CBDC next year in a way that it will be in charge of issuing and retrieving the digital currency and financial institutions will handle its circulation, according to bank officials.

"Test-running the pilot program will be similar to the process of bank notes circulating," a BOK official said.

The BOK has said the related move is not meant to prepare for the actual issuance of a cryptocurrency, but the bank is making necessary preparations "just in case."

Global central banks are accelerating their research on digital currencies to brace for a fall in demand for cash and the emergence of cryptocurrency in the private sector. The central banks in China and Sweden are aggressive in preparing to issue CBDCs.

This undated photo shows the headquarters of the Bank of Korea in central Seoul. (Yonhap)

sooyeon@yna.co.kr
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