The Bank of Korea (BOK) has finalized a $7.4-million (9.68 billion won) agreement with LG CNS Company to develop systems for testing the feasibility of a central bank digital currency (CBDC). This initiative is part of South Korea’s ongoing exploration of a digital currency system, focusing on the potential use of CBDC in transactions and settlements among financial institutions.

The BOK began mock tests of the CBDC in Aug. 2021, primarily for transactions between financial institutions. The extended feasibility test, expected to conclude by the end of next year, will explore the digital currency’s infrastructure support for the digital economy and its impact on the financial system and economy.