Bank of Korea Tests Remittances With CBDC With Success

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Last Updated on November 8, 2022 by Bitfinsider

The Bank of Korea, the central bank of South Korea, has successfully tested a scheme that facilitates international remittances by integrating the digital currencies of several central banks. Additionally, the central bank examined the national CBDC for purchasing NFTs.

The bank had previously built a monitoring system for money laundering and terrorism financing that encouraged data reporting. Based on the results of the trial, a CBDC can process up to 2,000 transactions per second.

Governor of the Bank of Korea Chang Yong Rhee recently delivered a keynote talk on the issue of the CBDC experiment in South Korea. He noted that the Bank of Korea’s 10-month trial with a digital South Korean won had concluded.

Rhee added that the distributed ledger technology (DLT) underlying cryptocurrencies lacks the scalability necessary for a retail CBDC. Consequently, it may be preferable to utilize the standard central ledger database.

Moreover, he determined that CBDC transactions are possible even when neither the sender’s nor the recipient’s devices are linked to the Internet, thanks to near field communication and other built-in communication features (NFC).

Rhee stated, “We have concluded that there is no such thing as flawless technology or CBDC designs that can simultaneously satisfy all the varied goals and expectations.” He stated that certain CBDC decisions necessitate trade-offs, such as enhancing compliance at the expense of privacy.

The CBDC experiment in South Korea began last year, and the first of two stages concluded in January.

From August to December of last year, the bank developed a cloud-based DLT-based CBDC simulation platform. It then examined fundamental operations such as production, issuance, distribution, and redemption.

In the second phase, the feasibility of integrating expanded services such offline transactions, digital asset transactions, and policy support activities was examined. This phase ended in June of last year.

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