A private version of Klaytn is in being developed in order to take part in South Korea’s CBDC pilot, to be launched later this year.
Ethereum software company ConsenSys has formed a technical partnership with Kakao’s Klaytn blockchain, with a view to developing a private platform for the issuance of a South Korean CBDC.
Klaytn is a public blockchain developed by Ground X, a blockchain affiliate of the South Korean internet company Kakao. Best known for its Kakao Talk mobile messaging app, Kakao has since branched out into the shopping and travel industries, among others. In 2019 the company commenced work on the Klaytn blockchain, which by the time of publication has the 25th largest market cap in the cryptocurrency space.
The partnership will see ConsenSys work to develop a private version of Klaytn, in preparation for an upcoming CDBC pilot program in South Korea. The project will also encompass making Klaytn compatible with Ethereum layer-2 solutions and will look to build interoperable bridges with other blockchains.
“Through this collaboration we will strengthen the efficacy of the Klaytn platform, readying it to process transactions which would conceptually support CBDCs, and also optimize it for Ethereum Layer 2 integration,” said Charles d’Haussy, managing director of Asia Pacific at ConsenSys.
Klaytn is a fork of the Ethereum blockchain, however, Ethereum’s public, decentralized attributes are generally not desired by government or institutional entities. A private chain is being constructed to “reflect the rising concern around data protection among financial institutions”, according to a press release.
CBDCs, or central bank digital currencies, are simply digital versions of national currencies, and as such, must be overseen by central powers. Yet, ConsenSys’ plan to make its pending private network compatible with existing public blockchains suggests national CBDC platforms needn’t be as siloed as many initially expected.
“We are happy to cooperate with ConsenSys to strengthen our public network and also build a private network that can cater to a successful CBDC distribution test,” said Jason Han, the CEO of Ground X, following the announcement of the partnership.