South Korea is all set to launch a central bank digital currency (CBDC) and for its second stage, it has already revealed details for a proposed consulting partnership.
According to the Bank of Korea (BOK), it has chosen such a consulting partner that will help it to develop the architecture for the CBDC project.
CBDC Phases and their working
The first step of BOK to launch CBDC towards the end of 2012 was to develop the research foundation which was completed in July 2020. The second stage deals with establishing the system architecture for the CBDC according to the research results and ideas from stage 1.
A BOK official said regarding the upcoming phase of CBDC that:
The BOK team is expected to collaborate with a consulting partner in order to chalk out the work procedure and architecture to run the digital currency system. This will enable both teams to come up with equally brilliant ideas on time.
The nominated company will aid BOK during this process to help in designing key features of the CBDC framework such as safety, data organization, etc.
Competition in CBDC system
The competition in the world is increasing in the field of CBDC infrastructure. Alongside South Korea, Japan and China are also upcoming with their own CBDC system. Although they have repeatedly claimed that they are not in a hurry to develop CBDC system yet their efforts are proving otherwise.
Japan has been reported to work with a ten-member team to work on digital currency issues. It has been enthusiastically working to set up this system and its Liberal Democratic Party has already warned Japan that it would impose a security threat if China succeeds first in achieving the technological standards for a CBDC.
China has also shown progress towards creating the world’s first operational CBDC and this has spurred a bit of alarm among its neighbors.