South Korea's central bank is on track to test digital currency next year

The Bank of Korea, South Korea's central bank, is set to test digital currency for pilot transactions next year.

South Korean state-run news agency Yonhap reported the news on Wednesday, saying that the Bank of Korea has completed the design and technology review of its digital currency and will now focus on testing it.

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The test would determine whether the digital won system operates normally in a "restricted environment." The Bank of Korea would be in charge of issuance and redemption of digital currency, while private financial institutions would manage its distribution, per the report.

"The CBDC [central bank digital currency] test system can be seen as the process of actually circulating cash," a Bank of Korea official told Yonhap. The central bank would reportedly use blockchain technology to manage CBDC test transaction details.

The Bank of Korea began its CBDC pilot program in April, and at the time, it said the plan would run until December 2021. The central bank has said that the pilot program is no guarantee that it will launch digital won.

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Yogita Khatri is a senior reporter at The Block, covering all things crypto. As one of the earliest team members, Yogita has played a pivotal role in breaking numerous stories, exclusives and scoops. With nearly 3,000 articles under her belt, Yogita holds the records as The Block's most-published and most-read author of all time. Prior to joining The Block, Yogita worked at crypto publication CoinDesk and The Economic Times, where she wrote on personal finance. To contact her, email: [email protected]. For her latest work, follow her on X @Yogita_Khatri5.

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