South Korea Halts Digital Won Pilot as Stablecoin Priorities Take Precedence

South Korea's central bank has indefinitely suspended its CBDC testing initiative, casting uncertainty over the future of a digital won. The Bank of Korea notified participating institutions of the pause just months before Phase 2 trials were slated to begin in late 2025.

The decision marks a strategic pivot toward stablecoin oversight as global CBDC development accelerates elsewhere. Three nations - The Bahamas, Jamaica, and Nigeria - have already launched sovereign digital currencies, while China advances its landmark e-CNY project.

Phase 1 testing in 2021 successfully validated basic currency functions including issuance and distribution. Yet officials consistently maintained the trials didn't imply imminent CBDC deployment. The suspension leaves South Korea without a clear roadmap for sovereign digital currency development.