The Bank of Korea has zeroed in on three regions, Jeju, Busan, and Incheon for the trial of its central bank digital currency (CBDC), media reports said. Notably, the country’s capital, Seoul, did not make the cut for the “private target CBDC test bed.”
The plan is to eventually pick one of the chosen regions and conduct experiments on payment and distribution at a public level. Additionally, the bank aims to secure franchises that can accept CBDC payments.
An official from the bank stated that the CBDC electronic wallet app would be accessible to both local residents and civilians, including tourists.
The Bank of Korea revealed that the regional closed tests of the CBDC would mimic the issuance and distribution methods of the current local currency scheme implemented in various regions during the COVID-19 pandemic to provide basic income and relief payments. Jeju, Busan, and Incheon, the three candidate regions, all presently issue and distribute their own local currencies—namely, “Tamranjeon,” “Dongbaekjeon,” and “Incheon e-Eum,” respectively.
Reportedly, Busan’s large number of eligible citizens posed a significant burden for the Bank of Korea, leading them to favor Jeju, which has the second-largest population.
The local report indicated that the local currency scheme faced fewer “technical barriers” compared to CBDCs.
Meanwhile, multiple banks in South Korea are actively researching stablecoins as alternatives to CBDCs, seeking to enhance efficiency in their operations.
