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South Korean internet giants bid for central bank digital currency pilot

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The Bank of Korea has announced preliminary results of the selection of a technical partner for the launch of the national digital currency (CBDC).

According to it, Ground X (a subsidiary of the technology giant Kakao), the SK Group conglomerate and Line Plus, an affiliate of Naver, filed applications for participation in the pilot. On July 9, the latter presented a blockchain platform optimized for the launch of CBDC.

So, Naver and Kakao are the main contenders for work on pilot projects of the first cryptocurrency of the central bank of South Korea, CBDC.

Let’s figure out who they are, and what they will do.

Kakao and Naver

Kakao formed after the merger of Daum Communications and Kakao Corp. The developer of Kakao Talks, the most popular instant messaging service in South Korea. This is an analogue of the so beloved telegram and whatsapp. The application recognized as the most popular messenger in Korea. It has more than 150 million registered users, and it is installed on 90% of the country’s smartphones.

Unfortunately, the company is in a situation of rather tough competition and missed the moment to enter the international market. But domestically, the platform continues to evolve in several directions at once. For example, nine of the top ten grossing games in the Korean Google Play store run on the Cocoa Talk gaming platform.

Naver has a more interesting history. As it is the largest internet portal and the most popular search engine in all of South Korea. The company accounts for 70% of searches in the country. Naver was launched in 1999 and was the first Korean internet portal to develop its own search engine.

In August 2000, the company surpassed itself and began providing a “comprehensive search” service. That allowed users to get multiple search results on a single page, grouped by type: blogs, websites, pictures, cafes, and more. Note – this was five years before Google launched a similar “universal search” offer.

Now these two giants are the main rivals in a very ambitious project.

Leaders to participate in pilot projects of the Bank of Korea

The Bank of Korea announced that the top three in the preliminary competition for digital-winning pilot projects are these two and the SK Group, which no one seems to take into account.

The bank launched the bidding process back in May in order to select, first of all, a technical partner. The pilot project itself aims to test the CBDC in a virtualized simulation environment based on distributed ledger technology. The study will run until June 2022, and its budget will be a fantastic amount of 4.96 billion won!

We must say that Korea is far from the first country to test the national currency. Israel, Russia, France, and a number of other countries are working in this direction. But the scale of the funds raised is impressive.

Recall that experts from the Bank for International Settlements recommended that global regulators pay more attention to the use of CBDC in cross-border transfers. Than to use in applications within the country.

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