South Korea Delays CBDC as Banks Bet on Stablecoins

A Bloomberg report revealed that South Korea paused its central bank digital currency (CBDC) trials to fast-track the launch of Korean won-pegged stablecoins, shifting regulatory focus away from Project Han River’s upcoming rollout phase to prioritize private token issuance.

https://twitter.com/pete_rizzo_/status/1939412759172579528

Why Is South Korea Pivoting from CBDC to Stablecoins?

The Bank of Korea reportedly notified participating banks to suspend the planned rollout of its CBDC in the fourth quarter of 2025, originally set to introduce peer-to-peer transfers and merchant payments. Officials attributed the suspension to high operational costs and an unclear commercialization strategy.

Instead, authorities will concentrate on the Digital Asset Basic Act’s stablecoin framework. The legislation mandates that issuers hold at least 500 million Korean won (approximately $370,000) in equity capital and meet licensing, reserve management, and consumer protection requirements.

Lawmakers had stated that a domestic stablecoin regime is vital to counterbalance the dominance of U.S. dollar-pegged tokens such as USDT and USDC, which saw over 57 trillion Korean won ($42 billion) in trading volume during Q1 2025.

The newly inaugurated administration of President Lee Jae-myung has championed won-based digital tokens as a tool to strengthen monetary sovereignty and spur financial innovation.

Digital Asset Committee head Min Byeong-deok warned that Korea risks falling behind in the global stablecoin race without swift action, which he says could outpace sectors like artificial intelligence and semiconductors.

Major commercial banks have already aligned with the policy shift.

Eight institutions, including KB Kookmin, Shinhan, Woori, and NongHyup, all early participants in the CBDC pilot stage, formed a consortium to issue a KRW-backed stablecoin by next year.

Their eagerness reflects clearer profit pathways: issuing private tokens carries lower upfront costs and offers direct revenue through transaction fees, unlike the more experimental CBDC program.

While the Bank of Korea continues to monitor stablecoin legislation, this strategic pause shows a broader realignment.

Seoul will leverage private-sector agility to accelerate digital currency adoption, reserving central-bank resources for regulatory oversight rather than pilot operations.

Banks, Tech Giants & Governments Race for Stablecoin Advantage

While Bitcoin remains the flagship and most popular crypto asset globally, the real competition lies in regulated, sovereign-pegged digital currencies. This trend continues to gain further traction, exemplified by Korea’s push for won-pegged stablecoins under President Lee’s Digital Asset Basic Act.

In the U.S., the Senate cleared the GENIUS Act on June 17 by a 68–30 vote, establishing the Treasury Department as lead regulator, requiring full reserve backing, monthly audits, and robust AML controls for “payment stablecoins.”

https://twitter.com/jessepollak/status/1935094904180641984

The bill now moves to the House, competing with the STABLE and CLARITY Acts.

Major firms are already positioning themselves. PayPal rolled out its stablecoin in 2023, and retail giants Walmart and Amazon are evaluating USD-pegged tokens to cut interchange fees and accelerate settlements.

JPMorgan introduced JPMD on Coinbase’s Base chain, signaling that banks will not cede ground to crypto-native issuers.

The global stablecoin market has swelled to roughly $253.6 billion, driven by USDT and USDC dominance and burgeoning corporate pilot programs.

While Seoul focuses on won-pegged tokens, its CBDC experiment remains alive and ready to resume once the private sector framework is in place.