Korea’s Central Bank Wants to Test Digital Currency for Supermarket Payments

Todaysgist, News South Korea’s central bank, the Bank of Korea (BOK), will allow selected participants to use digital tokens, converted from bank deposits, for payments at domestic supermarkets and convenience stores starting in December.

As reported by Bitcoin.com, Monday (23/9/2024), this initiative is part of a larger central bank digital currency (CBDC) trial being conducted in collaboration with six major commercial banks.

Under the pilot project, 100,000 participants will be able to use deposit tokens, which function similarly to vouchers, for purchases at various retail outlets. The Bank of Korea will issue wholesale CBDC to banks, which will convert them into deposit tokens for consumers to use at select retail locations.

The trial aims to assess whether CBDCs can improve or replace existing processes, where banks use their deposits at the central bank for transactions and settlements.

The project builds on plans originally outlined in October as part of a push toward a digital economy. Participating banks formed partnerships with retailers and developed digital platforms to ensure a smooth implementation.

NH Nonghyup Bank is involving its subsidiary Hanaro Mart, while other banks are negotiating with major convenience stores and supermarkets to join.

BOK is part of Project Agora, a global initiative exploring the tokenization of cross-border payments, which includes six major Korean banks.

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