Digital currency (CBDC) issued by the central bank, participation in Shinhan Bank and LG CNS.. Disaster support fund available

Shinhan Bank (Chairman Jin Ok-dong) announced on the 8th that it has completed a pilot construction of a blockchain-based digital currency platform with LG CNS in preparation for the issuance of CBDC (Central Bank Digital Currency) by the Bank of Korea.

According to the BIS survey, 86% of central banks in 65 countries around the world are making various preparations for the introduction of CBDC, of ​​which 14% are undertaking active development and pilot operations.

This pilot construction was possible through LG CNS’ blockchain technology and know-how. LG CNS has the highest level of development history in Korea related to blockchain business, and in particular, has specialized technology in financial transactions through cooperation with the Bank of Korea and Korea Mint Corporation. Shinhan Bank and LG CNS plan to continue joint research and development based on blockchain technology in the future.

Shinhan Bank predicted that if the Bank of Korea issues CBDC, an intermediary for the smooth commercial distribution and use of digital currency is needed, and to preemptively respond to its role as an intermediary, it has built a digital currency platform as a pilot.

The digital currency platform ▲A virtual bank of Korea issues CBDC and distributes it to an intermediary ▲An intermediary agency, Shinhan Bank, pays the issued CBDC to an individual ▲Individuals and affiliates use the issued CBDC for inquiry, settlement, remittance, currency exchange, It is configured to be rechargeable and is built in a blockchain-based token-type (data management for each transaction) method to secure transaction stability.

Some point out that it is necessary to establish a pilot system for domestic banks and prepare a customer response plan in preparation for the introduction of CBDC. It is explained that it is necessary to discuss a new payment system in consideration of the high possibility of introducing a hybrid CBDC in which private institutions participate among the currently discussed CBDC issuance forms, and to prepare for changes in the payment system of major trading partners such as China. .

In addition, the form of issuance of CBDC is divided into general funds used by converting from the balance of KRW held by individuals and disaster support funds issued by the government and local governments for specific purposes, and ledgers can be separately managed for each fund. In particular, the disaster subsidy was used to limit the usage or to set the expiration date.

An official from Shinhan Bank said, “As the importance of CBDC has increased, we plan to actively respond to the situation at home and abroad,” and “We will continue to make various attempts, such as expanding the established platform and applying it to the bank’s internal system.”

Meanwhile, at the G20 Vice Minister’s Meeting in January last year, we decided to promote regulatory improvement with a focus on financial stability this year, analyze the weaknesses of non-bank financial institutions, produce data to prepare policies related to sustainable finance, reduce the data gap such as aggregation, and reduce the data gap. It was agreed to promote the review of the macroprudential impact of digital currency (CBDC).

FINTECHPOST