Italy and South Korea central banks reach agreement on CBDC collaboration

On Dec. 5, Italy’s Banca d’Italia and South Korea’s Bank of Korea joined a pioneering agreement to share knowledge and collaborate on developing central bank digital currencies (CBDCs) and other financial technologies.

Through a memorandum of understanding with South Korea’s central bank, the Bank of Korea, both nations have agreed to share knowledge and information concerning information and communication technology issues related to real-time settlement systems and CBDCs.

The agreement, signed by Luigi Federico Signorini, Banca d’Italia’s general manager, underscores the two countries’ divergent approaches towards CBDCs. Italy has been leveraging distributed ledger technology to settle transactions through hash-linked contracts, favoring interoperability over the wholesale CBDC approach in other European nations.

Having embarked on a pilot of its CBDC infrastructure in October, South Korea plans to involve 100,000 citizens in testing its digital currency in 2024. This pilot encompasses both private banks and public institutions, with the Bank for International Settlements providing technical support.

However, it’s crucial to note the global landscape of CBDCs is fraught with contention. In Europe, some politicians vehemently oppose the concept, citing privacy concerns. Similarly, prominent figures like podcast host Joe Rogan have expressed strong reservations in the United States, framing CBDCs as a significant threat to personal freedom.