Major South Korean commercial bank Shinhan Bank is looking to collaborate with the country's central bank on developing a national digital currency.

Shinhan Bank has adult a blockchain-based pilot platform for a key depository financial institution digital currency, or CBDC, in partnership with LG Corporation's IT services arm, LG CNS, South Korean news agency Yonhap reported Mon.

Shinhan Bank and LG CNS created a virtual CBDC model where the Banking concern of Korea issues a CBDC, while other banking institutions similar Shinhan Banking concern act as financial intermediaries. The bank emphasized that CBDC intermediaries would be an integral part of a digital won ecosystem, stating, "If the Bank of Korea bug a CBDC, an intermediary bureau will be necessary for the shine distribution and use of digital currency."

According to the report, Shinhan Banking concern'due south CBDC system allows individuals and affiliates to apply the issued CBDC for payments, remittances and foreign commutation transactions. The platform likewise divides the CBDC issuance into general funds held by individuals and government funds intended for specific purposes like emergency funding.

The report does non specify which blockchain network was used. Shinhan Banking company and LG CNS did not immediately respond to Cointelegraph's request for annotate.

As previously reported, Shinhan Banking company is deepening its involvement in the crypto and blockchain industry. In January, Shinhan Bank invested in Korea Digital Nugget Trust, an manufacture consortium of businesses that provide digital-asset custody. The bank also participated in a $seven.v 1000000 funding circular for Blocko and supported blockchain-based projects for stock lending.

Meanwhile, the Bank of Korea has been progressing apace with its CBDC. Afterwards starting digital won trials in April 2020, the S Korean central bank issued a lengthy report in Feb, in which it stated that crucial legal issues with digital currencies must be addressed in order to motion forward.