In a significant development in the world of digital currencies, South Korea’s central bank, the Bank of Korea (BoK), has decided to suspend its central bank digital currency (CBDC) trials. This decision comes as participating banks in the CBDC project are increasingly drawn towards the allure of stablecoins, following the government’s promise to allow their issuance.
The BoK had completed the first phase of its CBDC simulation testing in December 2021, focusing on fundamental functions such as creation, issuance, and distribution of the digital currency. However, the regulator has now put a pause on preparations for the second phase of the pilot, which was initially scheduled for the fourth quarter of 2025.
The shift in focus away from CBDCs towards stablecoins is driven by President Lee Jae Myung’s emphasis on supporting companies involved in stablecoin projects. Notably, a bill has been proposed that would enable firms with equity as low as 500 million won (approximately US$370,000) to launch won-pegged stablecoins. This move aligns with the broader trend of growing interest in stablecoins globally.
Ryoo Sang-dai, a Senior Deputy Governor at the BoK, confirmed that the rollout of stablecoins would occur in phases and be spearheaded by regulated banks. The decision to halt CBDC trials reflects South Korea’s recognition of the evolving landscape of digital currencies and the need to adapt to the changing preferences of market participants.
The rise of stablecoins as a viable alternative to CBDCs is not unique to South Korea. Countries like the Bahamas, Jamaica, and Nigeria have already launched digital versions of their national currencies, showcasing the increasing acceptance and adoption of stablecoins on a global scale.
Furthermore, the recent stock market debut of Circle, the company behind the USDC stablecoin, underscores the growing prominence of currency-linked tokens in the financial ecosystem. In the United States, legislative efforts such as the GENIUS Act highlight policymakers’ focus on regulating and fostering innovation in the stablecoin space.
As South Korea navigates the evolving landscape of digital currencies, the decision to pause CBDC trials in favor of exploring stablecoin opportunities reflects a strategic response to market dynamics and regulatory developments. The broader implications of this shift underscore the need for a balanced approach to digital currency innovation that addresses both technological advancements and regulatory considerations.
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References:
– Cointelegraph: [https://cointelegraph.com/news/south-korea-pauses-cbdc-tests-banks-eye-stablecoins?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound]
– Finance Magnates: [https://www.financemagnates.com/cryptocurrency/south-korea-suspends-digital-won-project-amid-stablecoin-push/]
– CoinDesk: [https://www.coindesk.com/policy/2025/06/30/bank-of-korea-halts-cbdc-project-as-government-submits-stablecoin-bill-report]
– PYMNTS: [https://www.pymnts.com/cryptocurrency/2025/south-korea-pauses-cbdc-efforts-amid-rising-stablecoin-excitement/]
Social Commentary influenced the creation of this article.
