Connect with us
DAPA Banner

Crypto World

Bank of Korea kicks off real-world testing of its CBDC with nine banks

Published

on

Bank of Korea kicks off real-world testing of its CBDC with nine banks

The Bank of Korea and nine commercial lenders began phase two of a digital won pilot, testing bank-issued deposit tokens backed by central bank infrastructure to determine whether the system can support government subsidy payments and consume transfers and payments nationwide.

The second phase of Project Hangang adds two banks, Kyongnam Bank and iM Bank, to the program’s original seven. The institutions will now begin large-scale testing of the won-pegged deposit tokens built on a wholesale central bank digital currency (CBDC) layer, several local news outlets reported.

“Participating banks are actively securing diverse use cases, such as large businesses and small merchants with high public relevance and significant payment fee burdens, focusing on the potential for drastically reduced fees when using digital currency for payments,” said Kim Dong-sub, who heads the Bank of Korea’s digital currency planning team, according news outlet Chosun,

A key goal is to reduce the cost of transactions. By utilizing the deposit tokens, the BOK hopes to offer a lower-cost payment alternative for both large companies and small businesses that are currently burdened by credit card processing fees, according to the bank.

Advertisement

The Phase 2 start comes as South Korea’s Digital Asset Basic Act (DABA), a sweeping framework meant to govern crypto trading and issuance in one of Asia’s most active digital asset markets, is delayed because of disagreements among regulators over stablecoin issuance. The thorniest issue centeres on who should have the legal authority to issue KRW-pegged stablecoins.

In the new tests, peer-to-peer transfers, which were challenging in Phase 1, will become possible.

Kim also said “the government aims to begin disbursing subsidies in digital currency during the first half of this year,” with electric vehicle charging infrastructure subsidies expected to be among the first use cases.

The Bank of Korea also mentioned plans to enable digital currency as a payment method for ‘AI agents’, which are artificial intelligence systems that search for and purchase goods and services.

Advertisement

Source link

Continue Reading
Click to comment

You must be logged in to post a comment Login

Leave a Reply

Crypto World

SEC Approves Nasdaq Tokenization Trading Trial

Published

on

Nasdaq, SEC, Tokenization

Nasdaq has been given the regulatory green light to offer some tokenized stocks, which will trade alongside traditional securities on its exchange.

The US Securities and Exchange Commission on Wednesday approved Nasdaq’s pilot proposal to support the trading of tokenized versions of stocks and other securities.

Nasdaq first filed its proposal in September that sought to allow trades on high-volume stocks in either a traditional or tokenized form on the same exchange in a pilot with the key market infrastructure firm, Depository Trust Company.

Advertisement

The tokenized stocks would trade alongside their traditional counterparts on the same order book, at the same price, with the same ticker and identifying number and carry the same rights.

Tokenization, where an asset is represented on a blockchain, has seen a recent boom as major financial firms have tested the technology to shrink settlement times and experiment with longer trading hours.

Eligible participants can trade top tokenized stocks

According to the SEC’s approval filing, only “eligible participants” are to take part in the tokenization pilot and can choose whether to trade a traditional or tokenized stock.

The options for tokenized stock are limited to securities that trade in the Russell 1000 Index, which tracks the 1,000 largest publicly-traded companies in the US by market capitalization, along with exchange-traded funds tracking the S&P 500 and Nasdaq-100 indices.

Advertisement
Nasdaq, SEC, Tokenization
An excerpt of some of the key similarities between tokenized and traditional stocks under the Nasdaq’s pilot. Source: SEC

The SEC noted the Nasdaq’s proposal received feedback with concerns around market surveillance and diverging prices, which it said was later allayed by an amendment laying out more details.

Related: SEC’s ‘Crypto Mom’ calls for simpler disclosure rules, flags tokenization debate

The approval comes after the Nasdaq announced earlier this month that it had partnered with crypto exchange Kraken to allow its clients to move securities from its infrastructure to tokenized versions that can be used on blockchains and to allow public companies to create and issue their own tokenized shares.

New York Stock Exchange owner the Intercontinental Exchange has also set its sights on tokenization, and invested in crypto exchange OKX in early March to launch tokenized stocks.

SEC Chair Paul Atkins said on Tuesday that the agency would soon be seeking public comment on a range of crypto-related exemptions, including a “fundraising exemption” to allow some securities involving crypto to raise a set amount in any 12-month period while being exempted from registering under securities laws.

Advertisement

Magazine: Can Robinhood or Kraken’s tokenized stocks ever be truly decentralized?