The Bank of Korea's central bank digital currency (CBDC) plans are moving forward with nine participating banks.
The second phase of BOK's CBDC program is scheduled for September with real-transaction testing, Yonhap News Agency reported on Monday.
"The Bank of Korea will provide the infrastructure for the institutional CBDC, and each bank will conduct its own business using deposit tokens," a BOK official told YNA. "From the second phase, we will lay the groundwork for commercialization."
The BOK’s second phase will expand to include a total of nine participating banks, including Gyeongnam Bank and iM Bank. The country’s top three banks, KB Kookmin, Shinhan, Hana, and Woori Financial Group, are also participating in the CBDC project.
"The goal is to create an environment where the won can be traded freely regardless of time or place," Yonhap quoted the government as saying.
CBDCs are a digital form of blockchain-based fiat currency that are managed by the issuing central bank and considered legal tender. Only a handful of countries have officially introduced a CBDC. Bahamas unveiled one in October 2020, Nigeria in 2021, and Jamaica in 2022, according to the Atlantic Council’s CBDC tracker.
The tracker shows 41 countries are testing a CBDC, 33 more have one in development, while 15 have them inactive and nine others cancelled them. The U.S. Senate passed a bill that included a four-year ban on CBDCs last month, but President Donald Trump has put signing it into law on hold.
The BOK’s announcement comes as South Korean banks are building their own stablecoin infrastructure. Hana Bank has started designing the systems needed to support a future won-backed stablecoin, including issuance, redemption, settlement, digital wallets and anti-money laundering controls, according to local media reports. The bank has not committed to issuing a stablecoin, but is preparing its infrastructure ahead of legislation as lenders position themselves for expected competition in the sector.
Shin Hyun-son, who was named Bank of Korea Governor in April, used his first address in office to prioritize the CBDC and BOK-issued deposit tokens.
The South Korean Ministry of Economy and Finance announced plans to update its seven-decade-old national asset law to classify cryptocurrencies as national assets. That announcement builds on the country’s broader push to bring blockchain into public finance.