South Korea’s central bank, The Bank of Korea, just announced the release of their pilot program for the upcoming digital version of their national currency.
Central banks from around the world are going head to head as to which country will digitise their home currency in the most efficient, legal and optimised way. The rise of “Central Bank issued Digital Currencies”, or CBDCs, has been triggered into acceleration by Facebook’s project Libra which threatened the sovereignty of most countries.
The digital won pilot program will last until December 2021 which will give enough time for the central bank to figure out what legal actions must be taken, where certain pitfalls are and ensure an all-round fit to run product.
The bank noted that “Cash demand is still in existence, competitive payment services market, high level of financial inclusion. Considering these, it is not necessary to issue a CBDC in the near future.”
The fact of the matter is, unless central banks step up and ensure the most up-to-date, inclusive and efficient product is brought to citizens, others will take over their role. The first and prime candidate is Facebook who already has access to one the largest user-bases worldwide, larger than any one government.
CBDC’s have become an extremely important factor for central banks’ survival and their acceleration towards their creation proves they’re aware of that fact.