South Korean bank Shinhan, has announced the completion of the Central Bank Digital Currency (CBDC) pilot. The Project claims that the CBDC pilot is in a bid to get the bank ready for the consequent launch of the nation’s digital won by Shinhan. The project was put through in synchronization with LG CNS.
With the thrust of always looking for better ways of doing things, Central Bank Digital Currencies have become the hottest theme on the lips of banks all across the world. Since digital currencies have proven to look right in terms of efficiency, both local and cross-border payments have become secured and transparent.
Established in 1897, Shinhan Bank (formerly Hanseong Bank) is a Seoul-based lender. The Korean bank has joined forces with LG CNS. The information technology subsidiary LG CNS conduct a digital won CBDC pilot.
In the practical world, apex banks do not allocate fiat to the end-users without any intermediary. Smaller banks under the surveillance of the central banks are responsible for obtaining the fiat currency and distribute them among customers.
Shinhan presumes that the issuance of digital won by the bank of Korea will function in the same way. The CBDC pilot designs a virtual apex bank that issues and distributes the mock digital currency on the blockchain and sends it to Shinhan bank. Which in turn will be circulated among the clients.
The blockchain-based digital won outlines the permission to individuals and merchants to easily transform their account balances to the digital won. They can carry out a vast array of transactions, including money transfers, local payments, foreign exchange, and a lot more.
In September 2020, the Bank of Korea was on the hunt for CBDC consulting partner to work out the architecture of its digital won project. It appears everything is going as exactly as planned.