South Korea: Banks Testing CBDC-Based Financial Services

South Korea: Seven Financial Borrowers in CBDC Pilot Program

In South Korea, seven Korean financial borrowers have been authorized to participate in a pilot program testing financial services based on the Central Bank Digital Currency (CBDC).

Financial Services Based on CBDC

The Financial Services Commission of South Korea has authorized seven domestic banks, including KB, Shinhan, Woori, and Hana, to participate in a pilot program aimed at exploring the potential of central bank digital currency in everyday transactions.

Banks will issue deposit tokens that will represent digital assets secured by bank deposits. This innovative approach is meant to test the use of CBDC in practice and assess its potential benefits.

Digital Vouchers on a Distributed Ledger

According to a press release by the FSC, South Korea seeks to replace traditional physical vouchers with digital vouchers stored on a distributed ledger. This is intended to provide more convenient and efficient delivery of public services.

The pilot program also includes a platform for managing digital vouchers, enabling the government to distribute and track vouchers. However, a precise project schedule has not yet been determined.

Development of Cryptocurrency Regulations

South Korea continues its efforts to understand the potential of CBDC while improving the regulatory framework of the cryptocurrency market. In October, there were reports of plans to introduce new regulations concerning cross-border virtual asset transactions, including cryptocurrencies.

These changes, which are expected to include new registration requirements and reporting, are projected for the second half of 2025. They are part of South Korea’s commitment to developing financial solutions in the digital age.