Bank of Korea advances CBDC deposit token initiative to test real-world usage: report

The Bank of Korea is advancing its central bank digital currency (CBDC) experiment to test real-world usage in existing financial systems, local media outlets reported Monday.

According to a report from ET News, the South Korean central bank's CBDC pilot is entering a new phase involving core account systems in participating commercial banks. 

In the new phase, commercial banks would establish e-wallets, vouchers, and blockchain-based infrastructure to manage the CBDC for commercial usage in connection with the existing core banking system.

In the previous phase, the BOK distributed pilot CBDCs in deposit tokens through e-wallets provided by participating banks. Participating consumers experimented with using those deposit tokens for payments.

Now, participants will be allowed to use the CBDC deposit tokens in existing banking systems for transactions and settlements. The second phase will also include CBDC pilots to replace government subsidies or policy funds with digital vouchers, according to the reports.

The Block has reached out to the BOK for further comment.

Meanwhile, the U.S. administration under President Donald Trump has pledged to ban the issuance of such a digital currency.

Treasury Secretary Scott Bessent recently reiterated that there will not be a CBDC under the current administration, and said it will instead focus on making the U.S. a leader of digital assets. Last week, the U.S. Senate and House of Representatives reached a deal to advance a comprehensive housing legislation that also includes language banning the issuance of a CBDC until Dec. 31, 2030.