The central monetary authority in South Korea, Bank of Korea, just completed the first phase of its central bank digital currency mock testing which it started in August 2021.
The South Korean central bank revealed on Monday, January 24, 2022, that it has successfully finalized the pilot testing of the digital currency and is getting ready for the next phase.
The first phase was successfully completed in December 2021 and the second phase is set to be completed in June 2022.
The testing involved a trial of the most basic functions of the digital currency including its feasibility, production, issuance and distribution in a cloud-based virtual environment.
The second phase which is already underway will then review the technology needed to encourage mass adoption, transfers and payment in an offline environment, cross-border transfers and trading of the digital asset.
According to the Bank of Korea, “we will confirm the possibility of operating various functions, such as offline settlements, and the application of new technologies, such as one intended to strengthen privacy protection during the second phase of the test.”
The central bank is looking to collaborate with financial institutions to drive usage of its CBDC, which is quite similar to what China is currently doing with its digital yuan.
South Korea joins a couple of other countries that are planning to or have launched their own digital currencies.
According to data from the Atlantic Council, 91 countries are currently working on their sovereign digital currency and only 14 countries have reached the pilot phase.
South Korea was mentioned by Coin Telegraph as one of the top crypto-compliant countries over the past few years and the nation has revealed plans to become a global metaverse leader as well.