The central bank said in April it had launched a 22-month pilot that would end in December 2021, the report stated. The project isn’t an indication that the Bank of Korea is officially launching a digital currency — just that it is testing how that would work.
The third phase of that project is the distribution and circulation phase, according to the report, with current the second phase focused on analyzing related processes and looking to outside consulting. The first phase had a focus on designing and checking the technology and ended in July.
According to the report, the third phase will include distributing the currency and overseeing its circulation, with blockchain technology used to monitor how that goes.
The Bank of Korea, with its noncommittal stance to actually debuting a new digital currency, is contrasted to the Peoples’ Bank of China in the report. The Bank of Korea dissolved a committee dedicated to cryptocurrency research in January 2019 but has since revisited the issue, the report stated.
By comparison, the Chinese bank has been using $162 million in its central bank digital currency (CBDC) for pilot transactions, according to the report, with testing going on for the past year in major cities. A report from the South China Morning Post, quoted by The Korea Herald, said Beijing intends to use the digital currency “as a tool to hasten the transformation of the country’s economy.”
In January, PYMNTS reported that the Ministry of Economy and Finance in South Korea was considering a 20 percent tax on income generated from cryptocurrencies. That would have the effect of setting in stone a tax policy in an industry where none existed before.