South Korea’s central bank has quietly stepped back from its digital currency trial, putting its CBDC project on hold as interest shifts toward more commercially viable stablecoin initiatives.
The Bank of Korea recently informed partner banks that the second phase of its digital currency pilot, originally slated for later this year, will be delayed. The move comes as the newly elected government signals growing support for private-sector stablecoins backed by the Korean won — a key campaign promise of President Lee Jae-myung.
Instead of pushing ahead with its own digital currency, the central bank is now waiting to see how stablecoin policy unfolds. A draft bill submitted this month would allow companies to issue won-pegged tokens, provided they meet minimum capital requirements.
Privately, banks involved in the pilot are said to be frustrated with the lack of a clear commercial path for the CBDC and the high costs of participation. The first test phase, which ended in June and included 100,000 users, was deemed too resource-intensive. A second round, intended to expand the scope to more merchants and remittance services, is now uncertain and may be pushed to 2025 with a smaller group of participants.
At the same time, several major banks — including KB Kookmin, Shinhan, Woori, and NongHyup — are reportedly planning to launch a won-backed stablecoin by next year. For these institutions, the potential for returns and market relevance appears greater with stablecoins than with a centrally issued digital currency.
Investors reacted quickly. Shares in KakaoPay dropped 7% on Monday following reports of the CBDC delay, while Hecto Financial also saw a 5% dip. Bank stocks fared better, with KB Financial and Shinhan posting modest gains.
As Korea’s crypto policy evolves, the spotlight appears to be shifting away from central bank innovation and toward a stablecoin-driven financial future.
Alexander Zdravkov
Reporter at Coindoo
Alexander Zdravkov is passionate about questions of meaning. He is a fluent German speaker as well as He has been in the crypto space for more than three years and has an eye for spotting emerging trends in the world of digital currencies. Whether providing in-depth analysis or reporting on all topics on a daily basis, his deep understanding and enthusiasm for what he does makes him a valuable addition to the team.
Source: https://coindoo.com/south-korea-delays-cbdc-plans-as-banks-focus-on-stablecoins/