South Korea Halts CBDC Project Amid Stablecoin Focus

The Bank of Korea has suspended its Central Bank Digital Currency (CBDC) project before proceeding to the second round of testing, following increasing pressure from participating banks. This shift comes amid growing discussions about introducing a Korean won stablecoin.

The suspension of the CBDC pilot highlights South Korea’s pivot toward stablecoin development, potentially fostering innovation in the digital asset sector among banks.

South Korea’s CBDC Halt in Favor of Stablecoins

The decision to halt the CBDC project involved major Korean banks, who cited concerns over cost and lack of commercialization potential. The Bank of Korea’s pilot, involving significant expenditure, faced growing dissatisfaction. According to Bank of Korea Spokesperson, Bank of Korea, “The Bank of Korea has decided to pause talks on the CBDC initiative for now.” The participating banks, including KB Kookmin, Shinhan, and others, have turned to developing Korean won-pegged stablecoins, forming part of the Open Blockchain and DIDIA project. This move aligns with governmental support for increased private sector involvement in digital innovation.

With banks facing fewer barriers, the focus is shifting to stablecoin issuance, redirecting funds from the CBDC project to market-driven endeavors. Changes are anticipated in the Korean digital currency landscape, as these banks ramp up efforts for stablecoin leadership, potentially altering market liquidity. Increased supply of bank-backed stablecoins is expected to impact liquidity in the Korean financial sector upon implementation.

Industry reactions have varied, with some banks still contemplating joining this shift. No official statements were made from the Bank of Korea leadership aside from a spokesperson confirming the decision to suspend talks. Major players have refrained from public reaction, favoring official channels to discuss the ongoing shift in strategy. Despite ceased CBDC activities, there is minimal public discourse or dissent noted on social media or other platforms from the key industry figures.

Global Trends Influencing Korean Financial Strategy

Did you know? The shift from state-led digital initiatives to stablecoin projects mirrors trends seen globally, where countries like Japan and Singapore similarly paused CBDC pilots in favor of private-sector-led innovations.

According to recent data from CoinMarketCap, Ethereum (ETH) is priced at $2,461.94 as of June 30, 2025. The asset showed a 0.25% change over 24 hours, with a trading volume increase by 78.23%. Notably, Ethereum’s market cap stands at $297.20 billion, demonstrating its stable presence with an 8.98% dominance in the crypto market.

Insights from the Coincu research team suggest that South Korea’s shift to private stablecoin issuance may spur technological innovation and dynamic regulatory frameworks. This movement can potentially reshape financial operations within South Korean banks, encouraging enhanced digital asset deployment in the market.