Italy and South Korea Forge Collaboration on CBDC Development

The Bank of Italy and the Bank of Korea have inked a memorandum of understanding (MOU). The MOU aims to facilitate the mutual exchange of knowledge and information, particularly focusing on Information and Communication Technology (ICT) issues related to Real-Time Gross Settlement (RTGS) systems and Central Bank Digital Currencies (CBDCs).

While both central banks share a commitment to advancing CBDC technology, their approaches diverge. 

The Bank of Korea has engaged in retail CBDC trials and is currently prioritizing the issuance of a wholesale CBDC to support tokenized bank deposits. Initial trials will include programmable payments and voucher-style tests.

Italy, on the other hand, is actively participating in the European Central Bank's (ECB) retail CBDC trials. With the ECB moving into the preparation phase, Europe is poised to become one of the first major economies to launch a retail CBDC after China. Italy emphasizes interoperability for settling distributed ledger transactions, deviating from the wholesale CBDC approach adopted by some other European nations.

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National Initiatives and Pilots

South Korea has initiated CBDC technology pilots involving private and public sectors, with plans to invite 100,000 citizens for testing in 2024. The country began piloting its CBDC infrastructure technology in October, collaborating with private banks and public institutions and receiving technical support from the Bank for International Settlements.

In contrast, Italy's central bank focuses on interoperability in settling distributed ledger technology (DLT)--based transactions through hash-linked contracts, avoiding a wholesale CBDC approach.

Despite global interest in CBDCs, opposition persists. For instance, in the United States, figures like podcast host Joe Rogan voice skepticism, characterizing CBDCs as potential "checkmate" and "game over."