Local reports Indicate that the Central Bank of South Korea has suspended its Central Bank (CBDC) digital currency pilot program, swiveling the country’s attention in terms of focusing the nation towards a private stablecoin initiative.
The Bank of Korea (Bok) interrupted its “Han River project”, following the growing pressure of commercial banking partners who cited prohibitive costs and the absence of a viable commercial model, as Korea Herald reported.
The project spear Earlier this year was a two -level system involving a large CBDC for an interbank colony and tokenized deposits for retail use by 100,000 citizens. However, the seven participating banks have collectively spent nearly 35 billion won (around 26 million dollars) for the initial phase of three months and were not willing to continue without a clear path to profitability.
A last minute offer from the Governor of Bok, Rhee Chang-Yong, to cover half of the costs of the second phase of the project was rejected, reporting that the concerns of the banks were fundamental for the profitability analysis, not only the expenses.
In the void left by the state managed by the State, a consortium of Eight large commercial banksIncluding KB Kookmin, Shinhan and Woori, trained to develop a stable -pointed stable won. This initiative is actively supported by the Korea Financial Telecommunications and Clearings Institute (KFTC) and aims for a public launch at the end of 2025 or at the beginning of 2026.
Banks see a clear commercial advantage in the issuance of their own stablecoins, taking advantage of their customers to create new sources of income and prevent the disinterest of Fintech competitors or a currency managed by the State.
This strategic pivot was activated by a change in government policy under President Lee Jae Jae-Myung, who campaign On a Pro-Crypto platform which included a promise to approve the stable stables won handles.
The administration of President Lee accelerates the “basic law on digital assets”, the legislation which provides a legal framework for Stablecoins. The law grants in particular the Primary Regulatory Authority to the Financial Services Commission (FSC), and not to the Bank of Korea, and establishes a low capital requirement of $ 500 million (around $ 370,000) to encourage competition.
The private sector has moved aggressively to guarantee its position. KB Kookmin, the largest bank in the country, deposited 17 marks For potential stable ticks like KBKRW, which he called a “preemptive decision”. Meanwhile, Shinhan Bank has been preparing for this time for years, proving international concept payment with stablecoins in November 2021.
While the governor of Bok Rhee has publicly conceded That the stable -coated stables are necessary, him and other officials of the Central Bank continue to express serious concerns. They warn that a proliferation of private stables could undermine monetary policy, create a systemic risk recalling the collapse of the terra / Luna 2022 and accelerate the capital leak as users exchange stables for alternatives.
The volume of stablecoin transactions by USD in Korea reached $ 56.95 billion ($ 41.6 billion) in the first quarter of only 2025.
The central bank pleaded for a more prudent deployment, preferring that only highly regulated banks are authorized to issue stablecoins initially before expanding non -banking entities.
Meanwhile, the BOK has supervised its work of suspended CBDC as a “potential countermeasure with stablecoins”, a public option to relaunch if the private market is too volatile.
