Bank of Korea seeks tech partner to build central bank digital currency

South Korea’s central bank is moving forward with its national digital currency plans as it now looks for a technology supplier to design a pilot platform for the digital won.

The Bank of Korea announced that it launched a bidding process to choose a tech partner for studying the practicalities of launching a central bank digital currency in a test environment, Reuters reported Monday.

The BoK said that the latest move comes in response to fast changes in the global financial system, stating, “The share of cash transactions is decreasing significantly. The steps we are taking now are to prepare for the changes in the payment settlement system, changing rapidly.”

According to the report, the BoK’s pilot CBDC platform will contain simulations of commercial banks and retail outlets, test payments via mobile phones, fund transfers, and deposits. The pilot program is scheduled to run from August to December 2021 and could potentially be extended into next year.

The Bank of Korea published a CBDC-related book in February, announcing plans to test the distribution of a digital won and outlining the legal challenges associated with a state digital currency. 

In March, major South Korean commercial bank Shinhan Bank developed a blockchain-based pilot platform for a CBDC in partnership with LG Corporation’s IT services arm, LG CNS. The bank reportedly said it was willing to collaborate with the BoK on developing a national digital currency.