The Bank of Korea will invite 100,000 citizens to participate in CBDC pilot in 2024
On November 23, the Bank of Korea (BOK) announced that as part of a central bank digital currency (CBDC) pilot, it will invite 100,000 South Korean citizens to use deposit tokens to purchase goods. The test will begin in "September to October" 2024 and will last for three months.<br>Participants will only be able to use CBDC for payments and cannot choose to store, exchange, or send to other users. The goal of the pilot phase is to evaluate the feasibility and effectiveness of currency issuance and distribution.<br>The Bank of Korea will also collaborate with South Korean exchanges to integrate CBDC into a carbon emissions trading simulation system to test the feasibility of delivery and payment transactions.
National Bank of Cambodia's Bakong to Enable Cross-Border Transactions on Alipay+ Using QR Codes
The National Bank of Cambodia (NBC) has signed a memorandum of understanding (MoU) with Alipay to allow users of its digital currency, bakong, to access the Alipay merchant network and conduct cross-border transactions using QR codes. Bakong is not a central bank digital currency (CBDC), but operates on a blockchain and is a liability of the commercial banks that use it. The MoU will enable Cambodians to use their bakong wallets to shop with 83 million merchants worldwide on the Alipay network, while Chinese tourists with Alipay accounts can use the QR codes of the bakong KHQR system to shop in Cambodia. The bakong payment system was launched in 2020 and has already been used for 35.4 million transactions worth $12 billion in the first half of 2023.
BIS report: Privacy should be considered a key component of CBDC design
A report from the Bank for International Settlements (BIS) found that privacy should be considered a key component of CBDC design. The BIS report surveyed 3,500 people to understand how the use of CBDC as a payment method would vary based on privacy levels, and found that privacy increased participants' willingness to use CBDC by 60% when purchasing privacy-sensitive products.
Mastercard: Difficulty with central bank digital currencies lies in adoption
Ashok Venkateswaran, the head of blockchain and digital assets for Mastercard in the Asia-Pacific region, stated that currently, there are not sufficient reasons for widespread use of central bank digital currencies (CBDCs), making it difficult to adopt such assets. Additionally, Venkateswaran stated that there is no reason to use retail CBDCs in Singapore, but there are reasons to use wholesale CBDCs for interbank settlements.
IMF Managing Director Says CBDCs Could Replace Cash in Global Financial System
The managing director of the International Monetary Fund (IMF) has suggested that central bank digital currencies (CBDCs) could eventually replace cash in the global financial system. Kristalina Georgieva made the comments during a speech at the Singapore Fintech Festival, noting that around 60% of countries are exploring CBDCs and recognising their potential to enhance financial inclusion. Georgieva also highlighted the importance of cross-border payments and said that technological advancements such as AI and blockchain could amplify the benefits of CBDCs. The IMF has released a CBDC Virtual Handbook, which notes that CBDCs could help bridge financial divides and promote more inclusive growth if well-designed.
IMF to Publish Handbook on Central Bank Digital Currencies and Their Potential to Improve Payment Systems
The International Monetary Fund (IMF) is set to publish a handbook on central bank digital currencies (CBDCs), with initial findings suggesting that a well-designed CBDC could improve payment systems alongside other solutions. The handbook, due after the 2023 annual meetings, will cover a range of frequently asked questions on CBDCs, including policy objectives, legal considerations, cyber resilience and readiness to issue. While the US is not currently supportive of a digital dollar, other major jurisdictions such as the European Union appear more open to CBDCs, with an official at the Bank of Italy suggesting a digital euro could be the answer to stablecoins. The IMF paper advises policymakers to explore CBDCs carefully and systematically, given the complexities and novelty involved.
IMF President: CBDC can replace cash and there is still a lot of room for innovation
International Monetary Fund (IMF) Managing Director Kristalina Georgieva said that the public sector should continue to prepare for the deployment of central bank digital currencies and related payment platforms in the future. Georgieva said: "We have not yet landed. There is still a lot of room for innovation, and there is also a lot of uncertainty about use cases. CBDCs can replace cash because the cost of distribution in island economies is high. They can provide flexibility for more developed economies. In places where few people have bank accounts, they can improve financial inclusion." She also said: "CBDCs will provide a secure, low-cost alternative to (cash). They will also bridge the gap between private funds and the standards that measure their value, just like cash we can withdraw from banks today." The IMF pointed out that more than 100 countries are exploring CBDCs, accounting for about 60% of the world's countries. (CNBC)
India, Ukraine, and Russia Lead Retail CBDC Development, with Launches Expected in Coming Years
The 2023 PwC report indicates that despite the already live CBDCs of the Bahamas, Jamaica, and Nigeria, retail CBDC projects in India, Ukraine, and Russia are making rapid progress with formal announcements to launch within the next few years. India is at the forefront with its digital rupee development, Ukraine is accelerating its development in response to military conflict, and Russia is speeding up its CBDC project as a countermeasure to global sanctions.
Global CBDC Projects Surge, with 93% of Banks Engaged in CBDC Development
The 2023 PwC Global Central Bank Digital Currency (CBDC) Index and Stablecoin Overview report reveals that 93% of central banks are now engaged in the development of CBDCs, with nearly 20% expected to issue a digital currency shortly. The Bahamas, Jamaica, and Nigeria have fully launched retail CBDCs to date. India leads the digital rupee development, anticipated to fully launch its CBDC in 2024, while Ukraine and Russia are actively progressing with their respective CBDC projects.
BIS Governor: CBDC is the key to innovation in the financial system
Agustín Carstens, the head of the Bank for International Settlements (BIS), stated that central bank digital currencies (CBDCs) are key to innovation in the financial system, and that the private sector will play an important role in bringing CBDCs to market.
