South Korea’s central bank on Tuesday named Ground X, a blockchain subsidiary of the nation’s tech giant Kakao Corp., as the preferred bidder for the partner position on its pilot digital currency development program.
The Bank of Korea in May uploaded posts on its website seeking businesses interested in a 10-month partnership deal as a technological supplier to develop its central bank digital currency.
It plans to close the deal by the end of the month before kicking off the pilot program next month. Market watchers project the deal to be finalized smoothly.
Ground X had to compete with local online portal giant Naver’s affiliate Line Plus and conglomerate SK Group’s IT services provider SK C&C.
Ground X, launched in 2018, operates its own blockchain platform, Klaytn and signed a technological partnership with Ethereum developer ConsenSys earlier this year. ConsenSys has been working with central banks in Singapore, Australia and Thailand for their own central bank digital currency projects.
The BOK said earlier that the pilot program has been allocated a total of 4.9 billion won ($4.4 million).
The program, which will be carried out in a “virtual environment,” will consist of two stages.
The first stage, focusing on research and testing of central bank digital currencies’ basic role, is scheduled to be completed by December, followed by the second stage centered on more detailed concepts, such as privacy protection. The second stage is slated to wrap up in June 2022.
The announcement comes as central banks around the world have been carrying out tests and studies on central bank digital currency issuance. The People’s Bank of China is a forerunner in the race, with real-world trials already being carried out in several cities.