Reports have emerged that the Bank Of Korea found the first phase of their CBDC simulation project to be a success. This phase included manufacturing, issuing and distribution in a simulation environment, according to the report. They also concluded that the CBDC works under test conditions, though advanced functionality, including offline payments and personal information protection enhancement, must still be built in future phases. It also noted that more experiments were needed to test its efficacy in a real-world environment.

“The basic functionality is set. Now, they have to make sure that the components necessary for adoption are able to be set. The biggest one they noted is personal information protection enhancement. That’s tech speak for keeping private information private,” said Richard Gardner, CEO of Modulus, a US-based developer of ultra-high-performance trading and surveillance technology that powers global equities, derivatives, and digital asset exchanges.

“Functionality is important, but security is even more important. You’d rather have a CBDC fail to function than function with security breaches. China’s taken quite a long time to test their technologies. You don’t want to be the country that releases a CBDC into the mainstream and have the first reports be of bugs in the technology or a failure to scale --- or worse, be the victim of hackers,” noted Gardner.

“Across the globe, countries will be vying to bring their CBDC to market. Once they have a digital currency that meets their technological, security, and regulatory requirements, then they’ll be ready for the next step: education. Arguably, especially in some cultures, educating the populace will be a task that’s just as difficult as building the infrastructure,” said Gardner.

Modulus is known throughout the financial technology segment as a leader in the development of ultra-high frequency trading systems and blockchain technologies. Modulus has provided its exchange solution to some of the industry’s most profitable digital asset exchanges, including a well-known multi-billion-dollar cryptocurrency exchange. Over the past twenty years, the company has built technology for the world’s most notable institutions, with a client list which includes NASA, NASDAQ, Goldman Sachs, Merrill Lynch, JP Morgan Chase, Bank of America, Barclays, Siemens, Shell, Yahoo!, Microsoft, Cornell University, and the University of Chicago.

“We’re in a period of time that blockchain technologies have been proven. Cryptocurrencies are sticking around --- institutional investors have ensured that. The questions remaining are mostly regulatory in nature. How will digital assets be treated? What regulations will be required for exchanges? How will we ensure that custodians provide the safekeeping necessary for the industry to thrive?” asked Gardner.