South Korea's Central Bank to Trial CBDC Token Payments at Supermarkets and Convenience Stores

Bank of Korea's CBDC Token Trial to Launch in December

South Korea’s central bank is set to launch a large-scale trial of its central bank digital currency (CBDC) in December, allowing participants to use digital tokens for payments at supermarkets and convenience stores, according to a report by the Korea Times.

The Bank of Korea (BOK) has been working on developing a CBDC for several years, and this latest trial is a major step toward the potential launch of a full-fledged digital currency. The trial will involve six major commercial banks and 100,000 participants, who will be able to use deposit tokens, which function similarly to vouchers, for purchases at various retail outlets.

The BOK will issue a wholesale CBDC to banks, which will convert it into deposit tokens for consumers to use at select retail locations. The goal of this setup is to assess whether CBDCs can improve or replace the existing process, where banks use their deposits at the central bank for transactions and settlements. This project builds on a plan that was initially outlined in October as part of the push toward a digital economy.

Participating banks are forming partnerships with retailers and developing digital platforms to ensure smooth implementation of the CBDC trial. For instance, NH Nonghyup Bank is involving its subsidiary Hanaro Mart in the trial, while other banks are reportedly negotiating with major convenience stores and supermarkets to join.

notably, the BOK is also part of Project Agora, a global initiative that is exploring the tokenization of cross-border payments, which includes six major Korean banks. A banking industry official told the Korea Times that while the timeline for the CBDC test seems slightly delayed compared to their initial expectations, they are working to launch it by the end of the year, which would be a globally significant milestone.