The Bank of Korea's digital won pilot program has entered its second phase, with two more banks joining the field testing.

The Bank of Korea (BOK) announced the launch of the second phase of its digital won pilot program with nine commercial banks. The program tests the application of a bank-issued, central bank-backed deposit-type token in real-world scenarios, including government subsidy disbursements and peer-to-peer payments. Two new banks, Kyongnam Bank and iM Bank, joined the existing seven banks to conduct large-scale testing. Kim Dong-sub, head of the BOK's digital currency planning team, stated that the pilot program focuses on merchants and businesses with high public relevance and high transaction fees, exploring the potential for significantly reducing transaction costs through digital currency payments. Phase 2 testing will also support peer-to-peer transfers, which were difficult to achieve in previous phases. Furthermore, the BOK plans to begin disbursing government subsidies in digital currency in the first half of this year, with initial applications potentially including subsidies for electric vehicle charging infrastructure. Simultaneously, the central bank is exploring applications for AI agents to purchase goods and services using the digital won. This pilot program comes at a time when South Korea's Digital Assets Basic Law (DABA) has been delayed due to disagreements among regulators regarding the authority to issue stablecoins, particularly concerning who has the right to issue stablecoins pegged to the won. (CoinDesk)