The South Korean central bank wants to use CBDC to pay a value of $ 79.3 billion in Gov’t
The Governor of the South Korean central bank said that Seoul planned to use his Central Bank digital currency (CBDC) to pay more than 110 WONS ($ 79.3 billion) in public subsidies.
The South Korean newspaper Hankook Ilbo said that the head of the Korean Bank (Bok), Rhee Chang-Yong, said that payments would be made as part of a new “digital currency pilot project”.
Rhee spoke at a press conference held in the center of Seoul on August 28 following a meeting of the monetary policy committee earlier during the day.
This decision came as a surprise to Seoul. The BOK announced at the end of June this year that it put CBDC tests on hold in favor of the development of alternatives fueled by stables.
RHEE said that subsidy moves to the Greater Han River project, the country’s wider CBDC driver.
The Korean Bank offices in Gwangju. (Source: neoalpha)
The media said that the new CBDC move was an original idea of the Ministry of Strategy and Finance.
The ministry believes that subsidies fueled by CBDC will help prevent fraudulent use and improve the efficiency of budgetary policy. Rhee explained:
“This is part of the second pilot of the Han River project. The use of digital fiat to pay for subsidies will allow the main entrepreneurs to better manage subsidies when the agreements with subcontractors are concluded. ”
The BOK and the Ministry plan to issue entrepreneurs with CBDC tokens instead of banking or good transfers.
The games believe that blockchain technology will help retrace the funds and make sure they are not used. Rhee added:
“During his recent visit to the Bok, Koo Yun-Chèol, Vice-Prime Minister and Minister of Strategy and Finance, said that he would think that this would increase the efficiency and transparency of grant payments.”
The BOK wanted to emphasize that the new project would differentiate from the “first” pilot, which ended in the first half of this year.
While the first pilot has largely focused on commercial banks and their customers, the pilot focused on subsidies will be led by the private sector.
Many banks that participated in the first pilot expressed their dissatisfaction with the launching plans of the CBDC.
They complained that they thought it was unfair to be able to endure the burden of making investment costs in infrastructure.
But Rhee left the door open to the banking sector, suggesting that the Bok is happy to associate with lenders who are still at the head of CBDC affairs. The governor said:
“Given the magnitude of the project, 110 billions from Won, I think this is attractive for banks. We plan to focus on work with banks with a strong desire to invest. ”
