The Bank of Korea has decided to suspend its central bank digital currency (CBDC) initiative in response to newly proposed stablecoin legislation by the government.
Suspension of the CBDC Project
The Bank of Korea has halted its CBDC efforts following the proposal of new legislation concerning stablecoins on June 30, 2025. This decision is tied to the intent to evaluate stablecoins before further steps in CBDC development.
Impact on Banks and Investments
The suspension has significantly impacted the collaboration between local banks and businesses previously involved in testing the digital won. Reports indicate that each participating bank invested about 5 billion KRW, and they are now waiting for clear guidance on the national crypto policy.
Future of Stablecoins in South Korea
The financial implications of the project suspension may heighten interest in stablecoins, suggesting a more prominent role for these assets in Korea's financial ecosystem. Legislative focus on stablecoins could encourage broader adoption among institutional investors.
The Bank of Korea's suspension of the CBDC project amid new stablecoin legislation reflects a strategic shift in the country's priorities, potentially leading to significant changes in the local cryptocurrency sector.
