Korea Bank, The Central Bank of South Korea, has announced that it has launched a pilot program to test digital won.

Stating that the program was launched last month, the bank said in a statement made today that it will continue until December 2021. The 22-month program aims to define the technical and legal provisions required to create and publish digital currency.

South Korea wants to access many outputs with digital won program

Technically, the pilot program will reveal the central bank digital currency (CBDC) design, the method of CBDC's operation, and whether it will be possible to implement Blockchain technology.

In legal terms, the program will analyze the legal problems expected with CBDC and prepare a special change plan for the law accordingly.

The pilot program will operate according to the following schedule:

• - CBDC design and definition of requirements: 5 months (March 2020 - July 2020)
• - Technology review: 5 months (April 2020 - August 2020)
• - Business process analysis and consultancy: 4 months (September 2020 - December 2020)
• - CBDC pilot system construction and testing: 12 months (January 2021 - December 2021)

It should be noted that the Bank of Korea said that it is not necessary to export CBDC in the near future. Because, among other factors, cash demand still exists. However, Koreans still want to be ready to respond immediately to future changes in the payments industry.

The Bank of Korea initially made implications for conducting a CBDC research in December 2019. At that time, the bank hired experts to examine CBDCs and analyze digital currency initiatives from other countries.

Countries speed up digital money processes

Central banks around the world are speeding up their digital money research efforts. Last week, the French central bank launched an experimental program to test the integration of the digital euro into reconciliation procedures.

The Bank of International Settlements (BIS), which is accepted as the “central bank of central banks”, stated that the demand for digital methods such as CBDCs will increase due to the payment behavior changes brought by the coronavirus pandemic.

The statement made by BIS stated the following:

Flexible and accessible payment infrastructures operated by central banks can quickly become more apparent with central bank digital currencies (including CBDCs).