South Korea’s Central Bank has announced plans of developing its digital money. On Monday, the apex bank said that it will select a technology supplier that will build a pilot platform for a digital currency. This will bring the country a step closer to creating its own Central bank approved digital currency.
The Apex bank disclosed the process of looking for a partner to research the practicalities of launching a central bank digital currency in a test environment will be through an open bidding process.
Digital money has a plethora of advantages and economies are beginning to take cognizance of this. Digital money has proved to have a huge effect on the operations of the financial world while being a huge competitor of traditional money. The benefits of digital currency are endless, from easing the process of cross-border payments to making the economy truly cashless, etc.
The Bank of Korea therefore joins other central banks in the quest of developing a digital economy. The Bank of Japan started its experiments relating to digital currency last month. The bank announced that this experiment/testing phase will come to an end next year in March. In a report published by CPA Australia a few months ago, France’s central bank; Banque de France was considering the use of Ripple (XRP) as a platform for issuing its digital Euros. Saudi Arabia’s Central Bank signed a blockchain deal with US-based Ripple last month; the apex bank explained that the deal was both a way of exploring financial technology and was going to be the bridge to settle payments within the kingdom.
Although central banks are showing interest in digital money by kick-starting experiments or finding ways of integrating it into their financial operation, there is still a handful of them that frown at the idea.
A Bank of Korea representative while at a news conference said that “the share of cash transactions is decreasing significantly. The steps we are taking now are to prepare for the changes in the payment settlement system changing rapidly”. The Bank of Korea revealed that the pilot program will run between August and December this year before expanding to the next stage.
According to a survey from the Bank for International Settlements, central banks representing one-fifth of the global population are likely to issue their own digital currencies in the space of the next three years. Digital currencies are, therefore, going to be around for a long time. Their infinite benefits make them indispensable.