South Korea’s central bank has disclosed details for a proposed consulting partnership as part of its second stage of preparation for launching a central bank digital currency (CBDC).
According to the Bank of Korea (BOK), the desired consulting partner will be a local firm that will help the BOK build the architecture for the proposed CBDC project.
BOK’s Road to CBDC Implementation
July 2020 saw the end of the BOK’s first stage review process, which sought to establish a research foundation for the subsequent steps on the road to launching its CBDC pilot by the end of 2021.
The second stage of the process involves actually building the system architecture for the CBDC based on the research results and recommendations from stage 1.
Speaking about the upcoming phase, a BOK official said:
The BOK will team up with a consulting partner to map out the overall work process and architecture to operate the digital currency system, and both sides will also come up with specific action plans to successfully establish the pilot system on time.
The company that is selected to partner with the BOK during this phase will assist in designing key elements of the CBDC framework including security, applications, and data management.
Competition in Asia Heats Up
In addition to South Korea’s CBDC program, fellow Asian giants Japan and China are also working hard to create their own CBDC infrastructure despite repeated public statements indicating that they are in no hurry.
In July it was reported that a 10-member team was formed within the Bank of Japan’s Payment and Settlement Systems Department to work on digital currency issues. The department’s director-general Takeshi Kimura stated at the time that the level of consideration was being pushed “beyond the preparatory stage.”
"The Bank of Japan has created a dedicated team to intensify its work on a central bank-issued digital currency, or CBDC." https://t.co/V0b6S9myES
— JP Schnapper-Casteras (@jpscasteras) August 7, 2020
China’s progress toward creating potentially the world’s first operational CBDC has sparked a bit of alarm among its neighbors.
In June, a policy committee within Japan’s ruling Liberal Democratic Party released a proposal expressly stating that it would represent a national security threat to Japan if China became the first to achieve the technological standards for a CBDC.
Ryozo Himino, the incoming chief of #Japan’s Financial Services Agency, expressed reluctance to soften rules on #cryptocurrency. Instead, Japan should focus on the viability of a central bank digital currency (#CBDC) that the Bank of Japan is exploring pic.twitter.com/ggMIb7CjOa
— Economic Daily, China (@EDNewsChina) August 9, 2020
Also in June, the Bank of Thailand revealed plans to build a CBDC prototype in a pilot project. The preliminary research and feasibility study stage is planned to last until the end of the year. The announcement came following the January completion of Project Inthanon, the BOT’s collaborative proof-of-concept CBDC project.