With big improvements in cross-border functioning on the horizon in China and South Korea, East Asia may become the core of the central bank digital currency world.
Bank of Korea (BOK), South Korea’s central bank, said recently that its “second phase” of pilots had been “successfully completed.” The bank claimed to have validated the prototype digital KRW’s ability to be used in international trade.
According to Yonhap, the BOK has tried using its digital currency to send money abroad and been pleased with the results. Further, it was implied that the digital KRW had been used to purchase non-fungible tokens, testing its connectivity with the crypto world (NFTs).
It was also checked for compatibility with CBDC pilot programs in other countries. South Korea’s most reliable political partner, the United States, seems to have worked together on this. Publication notes:
Remittance transactions between nations were conducted by intermediary corporations “on the assumption that South Korea and the United States would issue CBDCs that make use of different [blockchain networks].”
The ability to work offline was also examined.
The BOK has announced that it will go through with the next phase of its pilot, which will examine how the digital won may be used for micropayments.
The increasing use of digital Yuan “Will Drive Trade.”
It is widely believed that the BOK and the Bank of Japan have accelerated their CBDC programs in direct reaction to China’s success with the digital yuan.
Although the digital yuan is still technically in the trial phase, it has been widely adopted in the country’s most wealthy cities for usage in a variety of financial transactions, including payments, online shopping, and money transfers.
An influential individual in the financial industry has recently expressed the opinion that this currency will usher in a new era of international commerce.
Liu Jun, Vice Chairman and President of Bank of Communications, reportedly made the statements during the Hongqiao International Economic Forum, as reported by China Securities Journal.
Liu Jun said that the CBC would aid in increasing the yuan’s prominence in the global monetary system, and he also brought up the idea of “enriching the cross-border applications” of digital yuan.
The People’s Bank of China has repeatedly said that the digital CNY is largely a domestic initiative and is not meant as a dollar replacement. However, experts think Beijing has grand ambitions for the coin’s cross-border use.
The digital yuan, according to Liu Jun, has “numerous advantages” over “other sovereign digital currencies.” The three main ones, he added, were “high levels of compatibility and security,” a “wide pilot” with “multiple usage scenarios,” and a “relatively mature technological base.”
Compiled by Coinbold