South Korea to test a new digital currency for its citizens

South Korea is embarking on a groundbreaking digital currency pilot program in late 2024, inviting 100,000 citizens to participate and experience the potential of a central bank digital currency. This initiative reportedly marks a significant step towards exploring the viability of CBDCs in real-world scenarios and their potential impact on the future of finance. The pilot program is spearheaded by the Bank of Korea (BOK).  

BOK will involve the issuance of a deposit token, effectively a digital version of the Korean won, to selected participants. These individuals will be able to utilise the digital currency for payments at participating merchants, providing insights into user behaviour and acceptance of the CBDC.  

A few other commercial banks will also be a part of the pilot program. These banks will choose participants sometime in September 2024 and the project will then run for the next three months. 

The BOK has outlined several objectives for the pilot program, including assessing the feasibility and effectiveness of issuing and distributing a CBDC, evaluating its impact on the financial system, and exploring its potential applications beyond payments. The findings from the pilot will then inform the bank's decision-making process regarding the future of CBDCs in South Korea. 

For citizens, it is a chance to test a digital currency. However, according to the report, they will be restricted to make certain kinds of payments at designated merchants only.