South Korea’s Shinhan Bank Demos CBDC Platform

South Korea’s Shinhan Bank Demos CBDC Platform

South Korea-based Shinhan Bank has built a pilot program for a potential central bank digital currency (CBDC), CoinDesk reported. The bank, which is headquartered in Seoul, got assistance from LG CNS on the project.

The bank has built the blockchain platform to prepare for the CBDC from the Bank of Korea (BOK), the report stated. A Shinhan Bank official said if the CBDC moves forward, an intermediary agent would be required to distribute and encourage use of the digital won.

The platform has divided the issuance of the CBDC into two categories, including a general fund for individuals alongside a disaster support fund for businesses and local government. The bank, according to CoinDesk, hasn’t decided yet whether the digital won would be distributed directly to consumers or through an intermediary like Shinhan Bank.

The BOK has been looking into the creation of a CBDC and had previously published results in February, the report stated.

CBDCs are on the rise, according to a survey by the Bank for International Settlements (BIS), which showed that 86 percent of the 65 central banks surveyed are considering one at some level, PYMNTS reported. Fifteen percent are moving toward pilot programs. The goal is to make CBDCs that are as much like physical cash as possible, preparing for times when cash is used less, and the general ecosystem is shifting toward one for digital payments.

The shift became more real when Facebook introduced Libra, its crypto project which is now known as Diem, was introduced. That gave a jolt to some legacy banks, which realized they would have to keep up or be overtaken.

China is currently the furthest along on making a CBDC, having conducted numerous trials since last fall. Exante Data strategist Grant Wilson said it all might be a road “to think of the yuan in a different way and chip away at hegemony of the dollar.”