The Bank of Korea has paused testing its central bank digital currency (CBDC) as interest grows in privately issued stablecoins pegged to the Korean won.
Details of the CBDC Pilot
The Bank of Korea has suspended its CBDC pilot after months of preparation with local banks. The first phase ran from April to June, involving 100,000 users making test payments. The second round was expected to begin later this year but has been postponed due to high costs and uncertainties about commercialization.
Changes in Digital Asset Policy
The project's delay coincides with changes to South Korea's digital asset policy under newly elected President Lee Jae-myung, who supports legalizing stablecoins. His party submitted a bill this month enabling companies with at least 500 million KRW to issue their own stablecoins, adding momentum to private sector initiatives.
The Market for Stablecoins and Investor Interest
The support for stablecoins is drawing interest not only from banks but also from retail investors. A recent survey found that 27% of South Koreans aged 20 to 59 hold digital assets, and 70% plan to increase their holdings in the coming year. Additionally, stablecoins are gaining international attention, with Circle, the issuer of USDC, being one of the most purchased stocks among Korean investors.
The suspension of the CBDC pilot in South Korea highlights a shift toward developing private stablecoins, potentially creating clearer monetization and commercialization opportunities in the digital asset market.
