Bank of Korea to Embark on CBDC Pilot in August

Bank of Korea, the central bank of the Republic of Korea and issuer of South Korean won, announced that it is going to embark on its CBDC pilot this month. Ground X, the blockchain subsidiary of South Korean Internet company Kakao has already been selected as the winner of a tender to help in the pilot.

The first phase of the pilot will focus on research and testing of the CBDC's basic functions, such as creating, issuance and redemption of the digital won as well as secret keys and wallet functionality. The phase one will be completed by December.

The second phase will look at more advanced concepts, including privacy-enhancing technologies, cross border payments, offline payments, and integration with digital asset systems. This is scheduled to be completed by June 2022.

The CBDC will run on the public blockchain Klaytn and be built on Ethereum by Ground X, which supports 3,000 transactions per second but will be enhanced to 10,000 using scaling technology from blockchain firms Onther, Consensys and ZK crypto.

Ethereum developer ConsenSys will be the lead technical partner for the CBDC pilot project. The firm has already been working with central banks in Singapore, Australia and Thailand on their own CBDC projects. Samsung affiliates (Samsung Electronics, Samsung SDS and Escor) will also participate in the pilot, including to test the functionality of the CBDC with Samsung Galaxy smartphones and assess whether offline payments are possible.

Other firms involved in the pilot include S-Core, which will work on CBDC issuance; Dream Security, which will focus on digital wallets; and KPMG, which together with Samsung SDS will provide business advisory.