South Korea Pauses CBDC Project as Banks Shift Focus to Stablecoins

South Korea's central bank has temporarily halted its wholesale central bank digital currency (CBDC) initiative, Project Han River, following resistance from commercial banks. Seven major financial institutions involved in the trials—KB Kookmin, Shinhan, Hana, Woori, NH NongHyup, Industrial Bank of Korea, and another unnamed bank—have pivoted toward forming a stablecoin consortium instead.

The first phase of testing, which concluded on June 30, involved 100,000 participants experimenting with tokenized deposits for consumer use and wholesale CBDC for interbank settlements. Despite initial investments totaling 35 billion won ($26 million), the project's second phase has been suspended indefinitely due to financial constraints and regulatory ambiguity.

Commercial banks were notified of the delay on June 26, though no formal announcement has been made by the Bank of Korea. The MOVE reflects growing institutional preference for private-sector stablecoin solutions over state-led digital currency experiments.