South Korea to Launch CBDC Pilot for Education and Welfare Vouchers

South Korea is moving forward with a pilot program for its central bank digital currency (CBDC), aiming to use digital currency for education and welfare vouchers.

This initiative is the result of a partnership between the Ministry of Science and ICT, the Financial Services Commission (FSC), and the Bank of Korea, who have signed an agreement to explore the viability of using CBDCs for vouchers related to education, culture, and welfare.

The new system seeks to address the limitations of the current voucher system, which includes issues like high transaction costs, delays, and the potential for fraud.

With CBDC technology, the government intends to establish a more efficient and secure way for citizens to access and redeem benefits. Rather than relying on physical cards or paper vouchers, citizens will soon be able to access government services through QR codes on their mobile phones.

Seven major banks, including KB Kookmin, Shinhan, and Woori, have shown interest in joining the pilot program, with the FSC approving the issuance of deposit tokens backed by deposit protection features.

Meanwhile, reports indicate that South Korea’s labor market is being significantly impacted by the growing interest in cryptocurrency. More young people are opting for crypto trading over traditional job roles, while job applications from those aged 40 and above have increased. In particular, many individuals over 50 are pursuing short-term work as they look to supplement their income in retirement.