Seoul, March 24 South Korea's central bank said on Monday it will conduct a test of using digital tokens converted from bank deposits for payments at both online and offline malls as part of its comprehensive test to introduce a wholesale central bank digital currency (CBDC).
Since 2021, the Bank of Korea (BOK) has been conducting a mock test of a CBDC, which is a digital form of a country's national currency issued and regulated by its central bank.
Unlike cryptocurrencies, CBDCs are designed to be a digital version of a country's traditional fiat currency with a fixed face value, reports Yonhap news agency.
Under the new project set to launch April 1, up to 100,000 applicants will be able to buy goods and services with their deposit tokens at several online and offline stores, including 7-Eleven convenience stores, Kyobo Bookstore branches, Ediya Coffee stores and the Hyundai Home Shopping website.
Participants will be able to convert bank deposits into digital tokens and use them for payments via QR codes through the apps of seven major banks, including KB Kookmin, Shinhan and Hana, the BOK said, adding that the maximum value of digital tokens they can use during the test period will be set at 5 million won (US$3,411.57).
The pilot programme, named Project Hangang, will be conducted through end-June, in cooperation with the Financial Services Commission (FSC), the Financial Supervisory Service (FSS) and other relevant organisations.
"The token-based payment is expected to reduce commissions for affiliated stores and to boost user convenience," a BOK official said, according to the report.
"After this usability test, the Bank of Korea will push to conduct other tests and programmes on transfers among individuals and digital vouchers," he added.
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