The Bank of Korea (BOK) is preparing to launch a real-world test of its central bank digital currency (CBDC) in April this year. The project, called the “Hangang Digital Trial Project,” will last three months and involve 100,000 users and seven major banks, with the aim of evaluating the viability of a fully digital payment ecosystem.
Testing Token Deposits in Real-World Transactions
As part of the project, users will be able to convert traditional bank deposits into “deposit tokens” – a form of digital asset backed by the CBDC. Transactions will be conducted at leading retailers, including 7-Eleven, Hyundai Home Shopping, Kyobo Bookstore, Hanaro Mart, Ediya Coffee, and more.
The seven banks participating in the trial are: KB Kookmin, Shinhan, Hana, Woori, NH Nonghyup, IBK Industrial Bank of Korea, and BNK Busan. These banks will be responsible for issuing deposit tokens, which will allow users to easily convert between traditional cash and digital assets.
Each participant will be given a maximum limit of 1 million won (about 693 USD), with a total cumulative transaction value of 5 million won during the trial. Payments will be made via a mobile banking application using QR codes, which will simplify the transaction process and improve processing speed.
Optimizing the banking payment system
This project not only tests a new payment method, but also aims to test the feasibility of distributed ledger technology** in modernizing the traditional banking payment system. A BOK spokesperson said the adoption of deposit tokens could bring a number of benefits, including real-time payments for merchants and reduced transaction fees by cutting out intermediaries.
If successful, the pilot could pave the way for a nationwide rollout of CBDCs, helping shape the future of South Korea's financial system.
Global CBDC Trends
South Korea is not the only country researching and implementing central bank digital currencies. According to research by the Atlantic Council, 134 countries – representing **98% of the global economy – are currently exploring or implementing CBDC-related initiatives.
Some countries have made significant progress, including:
- China: Expanding e-CNY trials
- Europe: European Central Bank (ECB) launches digital euro trials
- UK: Bank of England expresses skepticism about digital pound
- US: Former President Donald Trump signs executive order banning the issuance or promotion of digital dollars
In addition, the Mbridge project, with the participation of China, Thailand, UAE, Hong Kong and Saudi Arabia, is developing a platform to support real-time cross-border CBDC transactions.
South Korea's CBDC pilot with the participation of major banks and a series of leading retailers marks an important step in the modernization of the financial system. The success of the project could help shape the future of the digital economy not only in Korea but also globally.
