Last week, the Bank of South Korea announced a cut in the country’s growth forecasts, as well as a reduction in interest rates to 2.7 % with the intention of boosting the economy in the face of US taxes and dealing with political instability following the arrest of President Yoon Suk Yeol.

South Korea is going through a moment of tension that it intends to alleviate with this measure announced by the central bank on February 25.

According to the regulatory body, “the new growth forecast is 1.5 % of GDP for 2025, four-tenths below the 1.9 % initially forecast. In addition, the reference interest rate will also be reduced from the current 3 % to 2.75 %.”

The announcement quickly generated concern about its possible impact on key aspects, such as the indebtedness of families, incentive for internal spending, which would increase debts.

However, analysts believe that the reduction in interest rates could boost internal demand, which would translate into “a recovery in consumption and investments in key sectors such as construction, which have shown weakness in recent quarters.”

M.Pino

Source: barrons

(Reference image source: Towfiqu barbhuiya on Unsplash)

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The Central Bank of South Korea (BOK) announced its pilot with CBDC in 2024, with a group of 100,000 selected users who will be able to make only payments. Participants will not be able to store the currency or send it to another user.

According to the BOK statement, the pilot test could begin between the months of September and October of next year. Selected citizens will be able to purchase goods with deposit tokens.

Although this test will be carried out by the country’s Central Bank, other separate pilots are not ruled out if the banks propose other projects.

“The pilot project, which will test retail and wholesale CBDCs, will include private banks and public institutions, while the BIS will provide specialized technical support.”

While the pilot plan is carried out, the BOK will act in collaboration with the South Korean Stock Exchange in order to integrate its new digital currency “into a simulation system for carbon emissions trading.” The purpose is to determine the feasibility of performing delivery versus payment transactions.

The Asian country’s CBDC test plan initiative has received the approval of Agustín Carstens, General Director of the Bank for International Settlements (BIS), who has monitored the tests that began in 2021, making the relevant recommendations regarding security, technology and implementation of a central bank currency in South Korea.

M.Pino

Source: cointelegraph

(Reference image source: Kanchanara, Unsplash)

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La entrada Bank of South Korea will launch CBDC pilot in 2024 apareció primero en Bitfinance.