Key Takeaways
- The central bank’s internal reassessment has shifted attention away from a state-issued digital won and toward regulatory frameworks for Korean won-pegged stablecoins.
- Participating banks were notified of the decision
The Bank of Korea has formally suspended preparations for the second phase of its central bank digital currency (CBDC) pilot, halting a project that had been scheduled to proceed in the final quarter of 2025. Participating banks were notified of the decision, according to a Bloomberg report. The central bank’s internal reassessment has shifted attention away from a state-issued digital won and toward regulatory frameworks for Korean won-pegged stablecoins.
The Bank of Korea’s initial pilot phase concluded in December 2021, focusing on the basic issuance, circulation, and redemption mechanisms for a digital currency. Despite those technical tests, the BoK had consistently maintained that the work did not indicate a commitment to launch a CBDC. The second phase, which would have expanded into programmability and integration with broader financial systems, has now been shelved.
government’s focus has turned to stablecoin development as a financial strategy. As per reports, legislation under the Digital Asset Basic Act is now a central priority for regulators. The proposed law introduces a licensing framework for stablecoin issuers, including reserve and consumer protection mandates. Companies with at least ₩500 million in equity would be eligible to apply for issuance rights, pending regulatory approval.
Top government officials, including Democratic Party leaders and President Lee Jae-myung, have positioned won-denominated stablecoins as essential to maintaining South Korea’s monetary autonomy. Authorities have raised concerns about domestic reliance on U.S. dollar-backed assets, warning of long-term risks to financial sovereignty if foreign stablecoins continue to dominate local markets.
Min Byeong-deok, chair of the Digital Asset Committee, has described the stablecoin sector as a critical frontier, claiming it could surpass artificial intelligence and semiconductors in future economic importance. He has called for immediate regulatory clarity and support for compliant issuers. As part of this broader policy pivot, eight major South Korean banks — KB Kookmin, Shinhan, Woori, Nonghyup, among others — have initiated a joint project to issue a KRW-pegged stablecoin.
