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$ 70 토너먼트The Bank of Korea (BOK) announced on Jan. 24 that it had completed its first phases of tests for a potential central bank digital currency (CBDC).

According to a BOK press release, the BOK completed the first phase of CBDC tests in December 2021, and that it's currently "undertaking the second phase with no problems."

The BOK is working with Ground X and other private firms to build and test its CBDC simulations.

The initial phase of tests took place in a simulation built on a cloud database. The objective was to ensure smoothness of technical functions such as production, issuance, and distribution.

The BOK issued its test CBDCs onto a permissioned distributed ledger on the Ethereum blockchain, which was operated by nodes under both the BOK and private nodes.

The BOK's CBDC distribution system was built by private firms.

The second test phase, which is expected to continue through June 2022, will focus on additional functions such as payments for NFTs, real estate tokens and other digital assets. The BOK also plans on utilizing near-field communication (NFC) technology to enable offline payments, as well as scale the network's processing capacity.

The BOK has also addressed concerns about privacy.

On Jan. 24, the BOK issued a report on "the global discussion on key issues concerning CBDCs." In this report, the BOK argues that zero-knowledge proof (ZKP) protocols provide a solution for privacy concerns.

As the name suggests, ZKPs are a cryptographic method by which one party proves to another party the veracity of a statement or transaction without providing additional information about the sender.

In its report, the BOK notes that China does not consider privacy to be a major concern for CBDCs. Beijing's main focus is security. The BOK, however, states that South Korea takes the issue of privacy seriously.

The report also notes the solution proposed by the European Central Bank (ECB): anonymity vouchers. Basically, the ECB provides each CDBC user with vouchers that lets them spend a limited amount anonymously within a specific time period.

The ECB discusses anonymity vouchers in its own report on CBDCs, which was issued as far back as December 2019. This BOK mentioned it may consider this method alongside ZKP technology.

Before South Korea can start issuing CBDCs to the public, however, the BOK states the necessity of "earning the public's trust" and "laying the necessary legal foundations."

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