South Korea Halts CBDC Trials to Fast-Track Won-Pegged Stablecoin Development
Seoul shifts gears—digital won takes a backseat as regulators chase stablecoin dominance.
In a move that caught crypto watchers off guard, South Korea's central bank presses pause on its CBDC pilot program. The reason? A full-court press to launch a government-backed stablecoin pegged to the Korean won.
Priorities pivot from sovereignty to speed
Insiders whisper this isn't about abandoning CBDCs altogether—just delaying the marathon for a sprint. The stablecoin push aims to counter private sector dollar-pegged tokens flooding Korean exchanges. Because nothing motivates bureaucrats like losing control of the monetary supply.
The won-backed alternative promises faster settlements and tighter oversight. Translation: same surveillance, better marketing.
Bank of Korea officials insist both projects remain 'complementary.' Just not equally important right now. The stablecoin rollout could happen before 2026—assuming regulators don't get distracted by the next shiny fintech object.
Meanwhile, commercial banks eye the opportunity to issue their own regulated stablecoins. Because if there's one thing finance needs, it's more intermediaries taking cuts on digital transactions.
Lee Jae-myung made multiple crypto-related promises during his presidential campaign, including allowing stablecoins – Source: CoinTelegraph
CBDC Pause Signals Korea’s Shift to Regulated Stablecoin Rollout
The South Korea’s CBDC pause affects seven participating banks that were informed discussions WOULD be temporarily suspended. The Bank of Korea digital currency testing was scheduled for Q4 2025 but has been postponed as authorities reassess the role of CBDCs and also evaluate stablecoin alternatives.
A senior official at one of the seven banks taking part in the tests told Yonhap:
Banks expressed dissatisfaction with the expensive CBDC pilot suspension, and also preferred to focus on won-backed stablecoin launch opportunities instead. This dissatisfaction showcases the implications of the South Korea CBDC pause on future bank strategies.
Banks Reject Costly CBDC Program
The CBDC pilot suspension came after participating banks complained about high costs and also lack of clear profit models. One senior banking official said the second part of the CBDC trials was already “on the verge of collapse” as banks became unhappy with expenses. Hence, the South Korea CBDC pause adds pressure to reevaluate the costs involved.
At the time of writing, Korean stablecoin regulation offers clearer profit potential compared to the uncertain Bank of Korea digital currency project. Eight major banks, including KB Kookmin and also Shinhan, have launched a joint won-backed stablecoin launch initiative, following the South Korea CBDC pause.
Political Support Drives Stablecoin Focus
President Lee Jae-myung’s administration supports Korean stablecoin regulation allows companies with ₩500 million ($370,000) in equity capital to issue tokens. This strategic South Korea CBDC pause aligns with the stablecoin strategy and reflects political priorities.
Min Byeong-deok, head of the Digital Asset Committee, stated:
Democratic Party leaders view won-denominated stablecoins as essential for keeping monetary sovereignty, especially since foreign stablecoins accounted for over ₩57 trillion ($42 billion) in Q1 2025 trading volume. The South Korea CBDC pause thus plays a crucial role in reassessing monetary policies.
The Bank of Korea digital currency research continues while monitoring won-backed stablecoin launch developments. This recent MOVE with the South Korea’s pause with digital currencies allows evaluation of private sector solutions before resuming government digital currency efforts, and also gives regulators time to assess market conditions.
