Bank of Korea-Korea Exchange to Conduct 'CBDC Usability Test' for Carbon Emission Allowance Market

Lee Chang-yong, Governor of the Bank of Korea [Image source=Yonhap News]

The Bank of Korea and Korea Exchange have agreed to jointly conduct a usability test of central bank digital currency (CBDC) targeting the carbon emissions trading market.

On the 30th, the Bank of Korea and Korea Exchange announced that they signed a memorandum of understanding (MOU) at the Korea Exchange Seoul office to jointly explore ways to build digital finance and asset infrastructure.

Through this agreement, the two institutions decided to link the CBDC usability test with Korea Exchange's distributed ledger technology pilot experiment. Based on a shared understanding of the importance of strengthening the roles of the central bank and Korea Exchange in responding to climate change, the "carbon emissions trading market" was selected as the experimental target.

In this experiment, a virtual carbon emissions trading simulation system using distributed ledger technology will be established, and it will be checked whether carbon emissions trading using CBDC-based digital currency operates smoothly within this simulation system.

Governor Lee Chang-yong said, "The CBDC usability test is conducted to examine ways to build future infrastructure that can stably support the digital transformation of the economy," adding, "It is also significant in that it contributes to the international community's efforts to respond to climate change."

Chairman Sohn Byung-doo stated, "Through this cooperation, it is highly meaningful that the two institutions, which play a central role in financial market infrastructure, are pioneering models that reflect digital innovation technology."

Meanwhile, the Bank of Korea explained that this experiment does not mean the introduction of distributed ledger technology into the carbon emissions trading market currently operated by Korea Exchange. Also, the full-scale introduction of CBDC or the design model of the CBDC network has not yet been finalized. The Bank of Korea added, "Specific details of the experiment will be disclosed by the end of next month, and the technical experiment is scheduled to be conducted in the third to fourth quarter of next year."

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