The Bank of Korea has unveiled its selected regions for the trial run of its central bank digital currency (CBDC). Surprisingly, the nation’s capital, Seoul, didn’t make the cut. Instead, Jeju, Busan, and Incheon have been designated as the “private target CBDC test bed.”
In the near future, the Bank intends to finalize its decision among these regions and initiate experiments with public-level payments and distribution. Furthermore, they aim to secure franchises capable of accepting CBDC payments.
The bank official said, “The CBDC electronic wallet app will allow not only local residents but also many civilians, such as tourists, to participate.”
The regional closed tests of the CBDC will resemble the existing local currency scheme implemented in various parts of South Korea during the pandemic. Jeju, Busan, and Incheon, the chosen candidates, each currently issue and distributes their local currencies, namely ‘Tamranjeon’, ‘Dongbaekjeon’, and ‘Incheon e-Eum’, respectively.
However, Busan’s large number of eligible citizens reportedly posed a significant challenge for the Bank of Korea. As a result, the choice leaned towards Jeju, which boasts the second-largest population.
According to local reports, the local currency scheme poses fewer “technical barriers” compared to CBDCs. This could explain why multiple banks in South Korea are exploring stablecoins as alternatives to CBDCs to enhance operational efficiency.