South Korea Halts CBDC Trials as Stablecoins Gain Political and Market Traction

South Korea's central bank has paused its digital currency trials amid surging stablecoin adoption. The Bank of Korea confirmed the suspension of its CBDC pilot program, which began in April 2025, as privately issued stablecoins receive unprecedented political support.

President Lee Jae-myung's administration is actively promoting stablecoins as a financial innovation, proposing relaxed reserve requirements for issuers. This policy shift comes as major Korean banks file trademarks for stablecoin projects, signaling a strategic pivot toward private digital assets.

Senior Deputy Governor Ryoo Sang-dai has voiced concerns about the rapid stablecoin expansion, highlighting potential systemic risks. The central bank now awaits clarity on how CBDCs might coexist with government-backed stablecoin initiatives before proceeding with further trials.