South Korea’s, The Bank of Korea, is reportedly quickening its central bank digital currency (CBDC) plans and hopes to have a pilot potentially by the end of 2020. 

The news comes from local media site Chosun who say that the BOK has conducted a study that will be a foundation of the proposed digital currency. Focusing on technology, the report has analysed the various efforts from 14 nations, including China and its digital Yuan; the United Kingdom, Sweden and Japan. Other countries include Norway, Eastern Caribbean, the Bahamas, Switzerland, Singapore, Canada, Thailand, France, Hong Kong and the European Central Bank (ECB).

Little was mentioned in the report on its technical side. Perhaps, it could use blockchain technology a tactic which is gaining increasing traction. Or, the more popular distributed ledger technology (DLT), could be used, something which China is contemplating using, having shunned blockchain. The article did mention, however, that the focus will be on the consumer. The token is unlikely to be created for cross border transactions. 

Coronavirus pushes Korea to CBDC

The BOK had actually poured water on any CBDC creations just 6 months ago but in early April the bank shifted. The technical review was due to start by the end of 2020, according to reports recently but these plans have been quickened. 

The main reason has to be the Coronavirus concerns. As Asia Crypto Today pointed out in an article last week, more and more central banks are looking for a cashless society post-pandemic. 

For consumers, hygiene concerns and inflation rises are some of the contributing factors for the digital currency shift. Already online payments have increased tenfold, and it seems banks are shifting with the trend. CBDCs also offer banks greater tracking of funds for anti-money laundering and ease of transfers between banks, reducing costs and increasing efficiency. 

The benefits of “contact-free” and “non-face-to-face” settlements which CBDCs provide are clear motivators. As the pilot was said to be due in 2021, perhaps with this push forward in the technical review then the date could be put forward possibly too late 2020.