South Korea Begins CBDC Trial with 100,000 Users and 7 Banks
The Bank of Korea (BOK) has announced that it will launch a large-scale test of its central bank digital currency (CBDC) in April 2025. The pilot project, called the “Hangang Digital Test Project,” will involve 100,000 users along with seven major banks, enabling participants to convert traditional bank deposits into digital currency tokens, known as “deposit tokens.”
South Korea’s CBDC Pilot Aims for Real-World Payments
The trial will last for three months, with the goal of testing the feasibility of a digital payment ecosystem based on distributed ledger technology. Major banks such as KB Kookmin, Shinhan, Hana, Woori, NH Nonghyup, Industrial Bank of Korea IBK and BNK Busan will issue deposit tokens, allowing participants to use the digital currency at major retailers such as 7-Eleven, Hyundai Home Shopping and Kyobo Bookstore.
One of the main benefits of the implementation is the ability to make real-time payments to retailers, while also reducing transaction fees by eliminating the role of intermediaries in the payment process, the Bank of Korea said. This could help promote widespread adoption of digital payments in the future.
Transaction limits and public participation
The CBDC trial will limit the amount each individual can hold to 1 million won (about $693), with a total transaction limit of 5 million won during the trial period. Users will make transactions through mobile banking applications using QR codes.
The BOK is expected to issue a notice inviting the public to participate in this pilot by the end of March 2025. This is considered an important step in the development and testing of digital currencies in Korea, with the expectation of expanding the scope of CBDC application nationwide if the test is successful.
Global trends in CBDC
Not only Korea, many central banks around the world are also actively implementing digital currency projects. China is expanding its e-CNY pilot, while the European Central Bank (ECB) is conducting a digital euro trial. However, in the US, President Donald Trump issued an executive order banning federal agencies from participating in the development of digital dollars, which has caused much controversy in the financial community.
In addition, the Mbridge project – a collaboration between China, Thailand, the UAE, Hong Kong and Saudi Arabia – is developing a platform for real-time cross-border CBDC transactions, which has the potential to revolutionize international payments.
The pilot project in South Korea marks a major step forward in the realization of digital currencies, which promise to change the way payments and transactions are made in the near future.