Shinhan Bank Completes Pilot Construction of Digital Currency Platform with LG CNS

[Asia Economy Reporter Kwangho Lee] Shinhan Bank announced on the 8th that it has completed a pilot construction of a blockchain-based digital currency platform in collaboration with LG CNS in preparation for the issuance of the Bank of Korea's central bank digital currency (CBDC).

Shinhan Bank anticipates that an intermediary institution will be necessary for the smooth circulation and use of digital currency in the market once the Bank of Korea issues CBDC. To proactively respond and fulfill the role of such an intermediary, the bank has piloted the digital currency platform.

The digital currency platform is structured as follows: ▲ a virtual Bank of Korea issues CBDC and distributes it to the intermediary institution ▲ Shinhan Bank, as the intermediary, distributes the issued CBDC to individuals ▲ individuals and merchants can use the issued CBDC for inquiry, payment, remittance, exchange, and recharge. To ensure transaction stability, the platform is built on a blockchain-based token model (managing data per transaction).

Additionally, the issuance form of CBDC is divided into general funds, which are exchanged from the individual's KRW balance, and disaster relief funds granted by the government and local governments for specific purposes. Separate ledgers are maintained for each type of fund. In particular, disaster relief funds can have usage restrictions and expiration dates set.

This pilot construction was made possible through LG CNS's blockchain technology and expertise. LG CNS holds one of the largest development records related to blockchain projects in Korea and possesses specialized technology for financial transactions through cooperation with the Bank of Korea and the Korea Minting and Security Printing Corporation. Shinhan Bank and LG CNS plan to continue joint research and development based on blockchain technology.

A Shinhan Bank official stated, "As the importance of CBDC increases, we plan to actively respond considering domestic and international circumstances," adding, "We will continue various attempts, including expanding the constructed platform and applying it to internal banking systems."

This content was produced with the assistance of AI translation services.