LG CNS said on the 6th that it will join phase two of "Project Hangang," the Bank of Korea's pilot to test wholesale central bank digital currency and a deposits token.
In this phase, authorities will also push a plan to apply a "deposits token," which converts bank deposits into a token (digital asset) form, to real transactions for the general public and to the execution of treasury subsidies.
"Project Hangang" is a pilot that tests the Bank of Korea's Central Bank Digital Currency (CBDC)-based payment system in a real-world environment. The core is for the Bank of Korea (BOK), in cooperation with the government and the banking sector, to verify whether a deposits token can serve as a new means of payment and an efficient instrument for fiscal execution. Following phase one of "Project Hangang," LG CNS will again participate as the main operator in phase two, overseeing operation and advancement of the digital currency system.
The second phase focuses on laying the groundwork for commercialization of the deposits token. A plan is under review to pay subsidies for an electric-vehicle charging infrastructure project to be launched in the first half as a deposits token, with a view to verifying system stability and scalability. Applying a deposits token to public fiscal execution such as treasury subsidies would be a world first.
If subsidies are paid as a deposits token, every step from disbursement to final settlement would be recorded on Blockchain in real time, boosting transparency. The company noted that a digital voucher using a deposits token can be preset with purpose, period and amount so it is used only for specific purposes, allowing subsidies to be executed more effectively.
In addition, payments based on a deposits token are expected to cut intermediary steps, lowering merchant fees, supporting expense reductions for large operators and small business owners, and improving consumer payment convenience.
Before phase two, LG CNS also completed development of new functions to expand ease of use for a deposits token, including biometric authentication, person-to-person remittances, and automatic deposits token cash-in and cash-out. Based on this, the banks and points of acceptance where ordinary consumers can use a deposits token will expand.
Kim Hong-geun, head of LG CNS Digital Business Division (executive vice president), said, "We will continue to advance a digital currency infrastructure that can be used stably across public finance and everyday livelihoods," adding, "We will also actively support the implementation of various innovative services centered on a deposits token."