South Korea’s plans to expand testing of a central bank digital currency (CBDC) have been put on hold, as local banks shift their attention to stablecoins tied to the Korean won.
The Bank of Korea (BOK) had started its first phase of CBDC trials in April, which involved seven banks and around 100,000 users. That stage, which ended on June 30, focused on everyday payments.
A second round was planned for later this year, with a focus that included merchant use and money transfers.
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However, according to reports from Yonhap and Chosun Daily, the central bank has told participating banks to pause preparations for the next stage. A senior figure at one of the banks involved said the delay is due to growing interest in stablecoins and uncertainty over how the CBDC would work alongside them.
Several banks said the costs were too high, and others were frustrated that there was still no clear plan for how the CBDC would be used beyond testing. One official described the second phase of the trial as “almost falling apart”, with banks becoming less willing to continue.
The Bank of Korea is considering moving the next round of testing to 2026. Officials may also reduce the number of banks involved to make the process more manageable and less costly.
On June 24, South Korea’s central bank called for a gradual and carefully managed rollout of stablecoins in the country. What did Deputy Governor Ryoo Sang-dae say? Read the full story.
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