A South Korean commercial lender, Shinhan Bank, developed a blockchain-based pilot platform with its associate LG CNS. It is the IT arm of conglomerate LG Corporation which will help in creating CBDC. As per the local news outlet, the platform is in its pilot stage. It has developed a virtual model of a CBDC issued by the Bank of Korea to trial the platform. While the central bank will issue the CBDCs, financial institutions such as Shinhan Bank will serve as intermediaries in the system.
This growth occurred when the South Korean Central bank already launched a CBDC pilot program to trial the digital won’s technicalities and legalities. Nevertheless, the monetary regulations explained that it does not intend to establish the CBDC in the short term. As per the report, Shinhan Bank’s CBDC system enables individuals and affiliates to employ the issued CBDC for payments, remittances, and foreign exchange transactions.
Shinhan and LG CNS develop a Blockchain-based CBDC platform
The CBDC platform also allots the CBDC issuance into general funds held by individuals and government funds for specific emergency funding purposes. Further, the intermediary platform will be solely blockchain-based. Thus, assuring transaction stability is a crucial reason behind the same. This would make South Korea’s CBDC network distinctive from China’s since it does not employ blockchain technology to distribute its digital yuan.
Shinhan Bank is intensifying its engagement in the crypto and blockchain industry. In January, Shinhan Bank invested in Korea Digital Asset Trust, an industry consortium of businesses that offer digital-asset custody. The bank also engaged in a $7.5 million funding round for Blocko and supported blockchain-based stock lending projects. Meantime, the Bank of Korea has been advancing with its CBDC. After commencing digital won trials in April 2020, the South Korean central bank published a lengthy report in February. It discussed the legal issues encompassing CBDC issuance after unveiling its plans to roll out a virtual environment CBDC pilot.
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