South Korea Completed First CBDC Testing Program Phase

South Korea completed its first CBDC testing program phase and the Central Bank should be ready with the whole central bank digital currency testing program by the end of June this year so let’s read further in our latest cryptocurrency news.

The central bank of the East Asian country, Bank of Korea, carried out the first stage of the two-part CBDC testing in December. The institution also revealed that the project is now running its second phase. South Korea completed its first CBDC testing phase but the Korea Herald reproted that during this phase, the central bank examine the most basic functions of the financial product like issuance, distribution, and production.

The second stage will review the necessary technology for employment and wiring and payment offline and trading crypto acquired in December will also be tested. The bank expects to finalize the project in June this year but it also intends to discuss the actual launch and the commercialization of the CBDC with the Korean authorities. The institution also plans to expand the scope of an experiment by teaming up with the monetary entities. Other central banks across the globe like the People’s Bank of China, Bank Negara Malaysia, and the Central Bank of Nigeria became a part of the global competition to issue their own crypto form of their national currencies.

Despite being one of them, the Bank of Korea warned that these financial products could have side effects and those could be fully revealed when the CBDC officially saw the light of the day with the institution predicted. The central bank doubted that CBDCs could replace cash rather than savings in banks as most other economic believe:

“We are testing a slew of measures that could minimize the negative impacts of the digital currency on financial stability.”

While releasing a digital form of the national currency is the goal for other nations the actual benefits of these products are still dubious. Most experts think that the potential qualities of a CBDC should be examined before getting into action. The Federal Reserve is a proponent of the approach and the central bank of the USA said it is better to be right than to be first on launching a central bank digital currency. A few days ago, the FED outlined that the monetary product can have some controversial aspects and it could boost the payment option between businesses, countries, and individuals. On the other hand, the CBDCs could work against people’s freedom and could not benefit America’s financial stability.