In a pilot program run by the BOK (Bank of Korea) and financial regulators, South Koreans will have the chance to utilize deposit tokens based on a CBDC (central bank digital currency) next year.
Using deposit tokens called CBDCs, which are issued by commercial banks, 100,000 people will be able to buy items at retailers much like using a voucher.
The decisions made by the BOK follow a week of calls for nations to take the lead in pursuing CBDCs from Kristalina Georgieva, managing director of the International Monetary Fund.
Eleven nations have established CBDCs so far, with a few from the Caribbean and Nigeria among them. The use of CBDCs is being investigated by over 120 nations.
Speaking at a Singaporean event, Georgieva said, “The government may have to step in and provide some additional direction now that we’ve reached this juncture…To avoid being overshadowed or disturbed. However, to spearhead change, guarantee security and effectiveness, and fight disintegration.”
A “virtual handbook” developed by the International Monetary Fund to assist nations in establishing CBDCs that are compatible with one another was also released not long ago.
However, there has been little uptake of CBDCs in the nations that have attempted to implement them. Georgieva compared the endeavor to a voyage on the high seas, saying, “To gain speed, we need hoist another sail. Unpredictable rates of change are transforming our planet.”
The International Monetary Fund is worried that if CBDCs can’t settle on a common platform, a vacuum would open up, and cryptocurrencies will step in to fill it.
Cryptocurrencies are becoming more popular and the International Monetary Fund has issued a warning about them, implying that they might one day replace conventional currencies.
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