Kakao to run Korean central bank’s digital currency pilot project

2021.07.21 11:56:24 | 2021.07.21 12:08:13

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Kakao Corp. is poised to run Korea’s pilot central bank digital currency (CBDC) project, which will test technological feasibility and usefulness of electronic money.

The Bank of Korea (BOK) on Tuesday named Ground X Corp., a blockchain technology firm under the country’s dominant chat app operator Kakao, as the preferred bidder for operation of its pilot CBDC project. Other contenders were Naver Corp.’s Line Plus Corp., and SK Inc. C&C.

Once finalized, Ground X together with its partners will carry out the experiment on digital currency issued by the BOK. The bank plans to launch the pilot project next month and complete the experiment by June 2022.

The pilot project is divided into two phases of assessing the digital currency’s technological feasibility and verifying its usefulness in virtually simulated markets based on distributed ledger system, such as transferring digital money from one digital wallet to another and purchasing digital copyrights with virtual money.

Ground X’s partners include mobile-only lender Kakao Bank, mobile payment app Kakao Pay, Ethereum developer ConsenSys, accounting firm KPMG, and management consultant S-Core.

The CBDC pilot project does not mean that the bank will issue digital currency, said a BOK official. But the bank does see the potential in the digital currency as safe means for managing assets and payment in the possible cashless future, added the official.

By Kim Jung-hwan and Cho Jeehyun

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