The Bank of Korea has put its central bank digital currency (CBDC) pilot on hold, as political and market support grows for private-sector stablecoins pegged to the Korean won.
The move, first reported by Singapore’s Business Times, comes after months of preparation with local banks to test the digital version of the won. Seven banks joined the CBDC pilot’s first phase, which ran from April to June and involved 100,000 users making test payments at participating merchants, including 7-Eleven. The second round, which was set to begin later this year and expand to remittances and more merchants, has now been postponed.
Officials from several participating banks told local media the project was proving costly and lacked a clear path to real-world use. One source described the pilot as “on the verge of collapse,” citing frustration over budget concerns and the absence of a commercialization plan from the central bank.
The delay coincides with a broader shift in South Korea’s digital asset policy under newly elected President Lee Jae-myung, who campaigned on legalizing and promoting won-based stablecoins. His ruling Democratic Party submitted a bill this month that would allow companies with at least 500 million KRW (around $370,000) in equity to issue their own stablecoins. That proposal has added new momentum to private-sector efforts, with eight banks now planning to launch a won-pegged stablecoin by 2026.
According to Yonhap News and The Chosun Daily, the Bank of Korea is waiting to see how this legislation plays out before moving forward with further CBDC tests. A central bank official told local reporters that they are reassessing how a CBDC would fit alongside private tokens.
Banks seem to prefer the stablecoin route, which could offer clearer monetization opportunities. Half of the banks involved in the CBDC pilot — including KB Kookmin, Shinhan, and NongHyup — are also involved in the new stablecoin push.
Retail investors are also betting on crypto’s continued growth. A recent survey by Hana Financial found that 27% of South Koreans aged 20 to 59 already hold digital assets, and 70% of them plan to increase their exposure over the next year. While younger investors cited high returns as their main motivation, older users leaned toward using crypto as part of retirement planning.
Interest in stablecoins isn’t staying within Korean borders either. Following its IPO, U.S.-based Circle — the company behind USDC — became the most purchased overseas stock by Korean investors, who have collectively funneled $443 million into it. Locally, KakaoPay’s stock has surged 134% in the past month on optimism over friendly crypto policy.
