SEOUL, South Korea—The Bank of Korea is reporting it has successfully completed the first phase of its central bank digital currency (CBDC) mock testing, which started in August 2021.
The South Korean central bank said that the first phase of its CBDC mock testing was completed in December, while the second phase is currently underway, CoinTelegraph said, citing a YNA report.
The first phase of the mock test involved some of the basic functions of the sovereign digital currency, such as distribution and issuance.
The second phase of the CBDC pilot would test real-world functionalities such as cross-border remittance, retail payments and offline payments.
"We will confirm the possibility of operating various functions, such as offline settlements, and the application of new technologies, such as one intended to strengthen privacy protection during the second phase of the test," the bank said.
Bank of Korea (BOK) is also looking to onboard financial institutions for the second phase, quite similar to what China is currently doing with its digital yuan. However, unlike China, BOK-issued digital currency would also focus on user privacy, CoinTelegraph said.
The second phase is expected to complete by June 2022, after which the central bank plans to chalk out an official launch and commercialization plans, CoinTelegraph added.