South Korea Hits Pause on CBDC Development as Stablecoins Steal the Spotlight

Seoul's digital currency ambitions take a backseat—just as private stablecoins go mainstream.

The CBDC Cold Feet

South Korea’s central bank quietly shelved its digital won pilot this week, citing "market readiness" concerns. Translation: regulators blinked as USD-pegged tokens dominated real-world crypto payments.

Stablecoins: The People’s Choice

Tether and friends now process 3x more KRW transactions than all DeFi protocols combined. Who needs a state-backed token when offshore stablecoins already work—and don’t come with surveillance risks?

Finance Ministry’s Lose-Lose

Officials face mounting pressure: accelerate CBDC plans and risk destabilizing banks, or fall further behind the private sector. Meanwhile, retail investors shrug and buy more USDT—because nothing says "monetary sovereignty" like outsourcing your currency to the British Virgin Islands.

RECENTLY: BIGGEST KOREAN BANK FILES STABLECOIN TRADEMARKS FOR NEW CONSORTIUM

— cryptonary pro (@cryptonary_pr0) June 30, 2025

However, not everyone is happy with this rapid acceleration in stablecoin adoption in South Korea. BoK officials have sounded the alarm, with Senior Deputy Governor Ryoo Sang-dai cautioning industry players against moving too fast.

He has called for a gradual rollout of bank-led stablecoins that takes into account consumer protection and other measures that will mitigate market disruption.

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South Korean CBDC Trials Are on Verge of Collapse

The local publication reported that banks are not keen on continuing the second half of the CBDC trials as they have become disillusioned with the exorbitant cost of the program.

The banks have raised their concerns regarding this matter, stating, “The cost burden is too high without a specific commercialisation plan.” Moreover, they have demanded a clear, long-term roadmap regarding this matter.

About 100,000 participants were involved in the first stage of the South Korean CBDC trial run, which ran from 1 April 2025 to 30 June 2025, where they tested out the CBDC payment infrastructure.

The second phase was meant to expand the number of merchants and bring in remittances. However, the BoK is considering moving the tests from the second half of this year to early next year while limiting the participation of financial institutions.

Interestingly, South Korean banks are keen to issue their own stablecoins since there is a clearer commercialisation path that is more viable and financially beneficial. Recently, eight of the biggest South Korean commercial banks joined hands to issue a Won-backed stablecoin.

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South Koreans Hold 14% of Their Investment in Crypto

Over 18 million South Korean residents are involved in crypto trading, a significant surge resulting in crypto exchanges surpassing traditional equity markets such as the Kospi and Kosdaq.

According to a recent industry survey, over half of South Koreans aged 20 to 59 have traded crypto, with one in four still holding digital assets. Many are managing wallets in multiple domestic exchanges, with crypto accounting for at least 14% of their total portfolio.

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Key Takeaways

• South Korean central bank is holding back until it sees the government’s stablecoin strategy and its integration with CBDCs
• The BOK has called for a gradual rollout of bank-led stablecoins that have taken into account consumer protection and other measures that mitigate market disruption
• South Koreans manage wallets on multiple domestic exchanges, with crypto accounting for at least 14% of their total portfolio