South Korea to start its own CBDC project soon

South Korea has quite a bit of recognition in the crypto industry because of its Kimchi Premium and massive altcoin market.
South Korea has quite a bit of recognition in the crypto industry because of its Kimchi Premium and massive altcoin market.

South Korea has quite a bit of recognition in the crypto industry because of its “Kimchi Premium” and massive altcoin market. The country’s monetary authority has also decided to move forward with their plans on Central Bank Digital Currency (CBDC).

A local media company noted the three major reasons behind the governments’ plans to create CBDCs: crisis, competition, and opportunity. The South Korean central bank also signaled the three reasons.

Central Bank has made some notes

The Central bank of South Korea notified that the first round of testing might take place in the country itself before December. This will help them to know if any basic operational requirements are needed to be improved.

The officials have decided to lay down the second round of testing during the first few months of 2022. The second round would aim the test the security, payment functions, and use cases. The central bank also notified that the conclusions would also be made at that time.

The bank notified that CBDC could not only change the perspective of people but can also bring some modifications to the Bank of Korea Act. This is the primary reason for financial and political stakeholders working closely in South Korea.

Crypto craze in South Korea

Jin Chang-ho, the managing director of a business management consulting firm and the in charge of CBDC, Kerney Korea, said that there is a high probability of CBDCs entering the main Korean economy. He added that the global CBDC craze was one of the driving factors behind this prediction.

Crypto innovations are at their peak in South Korea, with around 4% of South Koreans holding cryptocurrencies. However, the government recently declared the imposition of tax on crypto profits. In addition, the government will also impose a 20% income tax on transfer gains after touching the 2.5 million thresholds.

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