Odaily Planet Daily reports: The Bank of Korea has announced the launch of the second phase of the digital won pilot program with nine commercial banks, testing real-world applications of bank-issued, central bank-backed deposit tokens, including government subsidy disbursements and peer-to-peer payments. Two additional banks, Kyongnam Bank and iM Bank, have joined the original seven banks to conduct large-scale testing.
Kim Dong-sub, head of the South Korean digital currency planning team, said the pilot focuses on merchants and businesses with high public relevance and high payment fees to explore the potential of digital currency payments to significantly reduce transaction costs. Phase 2 testing will also support peer-to-peer transfers that were difficult to achieve in earlier phases.
In addition, the Korean government plans to begin distributing subsidies in digital currency in the first half of this year, with initial use cases potentially including subsidies for electric vehicle charging infrastructure. Meanwhile, the central bank is also exploring applications in which AI agent systems use digital won to purchase goods and services.
At the launch of this pilot program, South Korea’s Digital Asset Basic Act (DABA) has been delayed due to disagreements among regulators over who should be authorized to issue stablecoins, particularly those pegged to the Korean won. (CoinDesk)