South Korea has temporarily halted the next phase of its central bank digital currency (CBDC) pilot, signaling a cautious approach amid evolving priorities in the digital asset space.
The Bank of Korea (BOK) informed participating banks that discussions for the second stage of its CBDC testing, initially planned for later this year, will be paused for reassessment.
This pause coincides with a growing emphasis on stablecoins under the administration of newly elected President Lee Jae-myung. Shortly after taking office, Lee proposed easing issuance requirements to allow companies with as little as 500 million won (approximately $370,000) in equity to issue won-backed stablecoins. His government views stablecoins as a potentially significant component of South Korea’s digital asset strategy.
South Korea’s central bank halted its digital currency testing project, telling participating banks it will temporarily pause discussions related to the initiative https://t.co/TuBn6SLXvo
— Bloomberg (@business) June 30, 2025
Despite this political push, BOK officials have expressed caution. Senior Deputy Governor Ryoo Sang-dai highlighted the importance of a gradual, bank-led rollout of stablecoins, ensuring robust consumer protections and measures to prevent market disruption. This stance reflects the central bank’s intention to strike a balance between innovation and financial stability.
South Korea remains one of the world’s most active cryptocurrency markets, with around 18 million people—over a third of the population—engaged in digital asset trading. On peak days, trading volumes on local crypto exchanges have even surpassed those of traditional stock markets such as the Kospi and Kosdaq. A recent survey indicated that more than half of South Koreans aged 20 to 59 have traded cryptocurrencies, with one in four currently holding digital assets. For many investors, crypto accounts for at least 14% of their financial portfolios, often spread across multiple domestic exchanges.
The enthusiasm for digital assets has also influenced the stock market. Shares of companies linked to the BOK’s CBDC initiative, including Kakao Pay and LG CNS, have seen significant gains in recent weeks, reflecting investor optimism about the country’s digital currency developments.
This development underscores South Korea’s careful navigation between advancing digital currency innovation and maintaining financial system stability. The BOK’s measured approach suggests that while digital currencies remain a priority, regulatory prudence will guide their implementation.
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