South Korean Digital War

Main article: National cryptocurrencies (CBDC)

2020

South Korea pays COVID-19 benefits in cryptocurrency

In mid-July 2020, information appeared that South Korea began to take advantage of cryptocurrencies. Each citizen of this country is supposed to receive a benefit in cryptocurrency as part of the quarantine caused by the COVID-19 pandemic. Its size is ₩ 100 thousand ($83).

Some provinces of South Korea already have their own digital money and use it to pay the population as a benefit. Gyeonggido Province, which is home to 12 million people, is a good example of the effective use of digital means. In Gyeonggido, special bank cards are available to residents to receive funds that are assumed under the unconditional basic income program, as well as the special application Gyeonggi Money. This solution is especially common among small businesses. Those who have implemented support for POS terminals to pay for goods and services can easily accept local digital money from consumers.

In South Korea, pay COVID-19 benefits in cryptocurrency

The essence of the project is that citizens can use the cash allowance only when visiting local stores, thus allowing them to support small businesses during quarantine measures. Citizens have the opportunity to use the allowance for three months. Gyeonggido province includes 31 administrative districts, various payment solutions for the use of benefits are available to residents, including Gimpo Pay and Korean Mint (KOMSCO). By the way, Korean Mint is active in the field of digital identification, and South Korea, as you know, is one of the leaders in this industry.

The creation of local digital currencies, as well as the introduction of the initiative on unconditional basic income, were successful. The authorities are considering introducing similar measures elsewhere in the country.^[1]

Central Bank of South Korea included a digital war in the state program for the development of the economy

In mid-June 2020, the South Korean Central Bank confirmed its plans for a national digital currency, but so far refuses to commit to releasing a digital war.

According to the Hankyoreh newspaper, the Central Bank of South Korea has issued a strategic document outlining medium and long-term prospects for the digital currency. Despite repeated statements by the Central Bank of South Korea that there is "no urgent need for a digital currency," the tone of the new document has changed markedly.

The authors of the document claim: "Some central banks are promoting the introduction of CBDC, and the private sector is expanding the use of fintech solutions, digital currencies and payment/settlement applications. We must respond actively to all these changes. "

The document also says that the Central Bank of South Korea will continue preparations for the launch of a digital war "if it becomes necessary." It is known that the Central Bank accelerated preliminary plans for the introduction of digital warfare in response to the coronavirus pandemic and the rapid development of the digital yuan in China. The pilot project is planned to begin in December 2020, but it can be deployed faster if the Central Bank of South Korea continues to be ahead of schedule.

Based on its internal research and trends in the preparation of CBDC in major foreign countries, the Central Bank believes that "it should contribute to the preparation for the implementation of CBDC in South Korea, if necessary." In the second half of 2020, the Central Bank of South Korea undertakes to create a "digital innovation division," which will conduct a study of the possible introduction of technological achievements in the industry, such as blockchain, artificial intelligence and Big Data. Representatives of the bank added that they plan to improve monitoring capabilities and increase the efficiency of payments using new technologies.^[2]

The Central Bank of South Korea began testing its cryptocurrency

In mid-April 2020, the central bank of South Korea launched a pilot program for monitoring, analyzing and checking the new cryptocurrency. The test will continue until the end of 2021. During the 22-month program, it is planned to determine the technical and regulatory provisions necessary for the creation and release of digital currency.

The pilot project is also designed to determine the design of the future digital currency of the central bank (CBDC), the method of operation and the blockchain on the basis of which the digital war will be issued. In addition, the project will analyze possible legal problems that prevent the release of state cryptocurrency.

The Central Bank of South Korea launched a pilot program to monitor, analyze and verify the new cryptocurrency

The central bank stressed that it is not yet ready to launch CBDC in South Korea, especially since the demand for cash remains high. So far, there are no technical and regulatory provisions necessary to launch a digital currency, but the country's regulator believes that it should respond in a timely manner to changes in the payment sector.

The United States and Japan did not plan to release CBDC in the near future, but recently they changed their decision and began to expand research in a new area, "said the official representative of the central bank. - Our bank also decided to be active in conditions of rapid change of payment environment here and abroad, so we are going to set up pilot CBDC system and check technical and legal issues related to its implementation.

The pilot program will be divided into four stages: determining the requirements for creating a digital currency of the Central Bank, investigating available technologies, analyzing and consulting on business processes, and creating and testing a pilot system of state cryptocurrency. It is for the last stage that the most time is allotted - a whole year.^[3]

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