South Korea Halts CBDC Project as Regulators Prioritize Won-backed Stablecoin

South Korea’s central bank, the Bank of Korea (BOK), has placed its central bank digital currency (CBDC) project on hold. This decision, as detailed in a recent Bloomberg report citing an unnamed BOK official, signifies a strategic redirection of regulatory focus towards the expedited issuance of won-backed stablecoins.

The Bank of Korea (BOK) is working on “Project Han River,” a plan initiated this year with the participation of seven banks. The second part of its digital currency trial was set for the last three months of 2025. This trial aimed to test features such as sending money directly between individuals and paying at shops.

However, the banks involved have reportedly expressed concerns about the project’s high costs and the lack of a clear plan to generate revenue from it. Due to these concerns, the central bank is now reevaluating its digital currency plans.

BOK Halts Digital Currency Project

The official announcement stated that discussions about the digital currency trial are currently on hold. Instead, officials are focusing on creating clear rules for private stablecoins. This change appears to align with the government’s primary economic objectives. President Lee Jae-myung, who started his term this month, has made introducing official South Korean digital money a top priority.

The government prefers a system where companies with as little as ₩500 million (approximately $370,000) in capital can issue stablecoins, provided they obtain regulatory approval.

Notably, leaders in the Democratic Party believe that issuing local stablecoins backed by the South Korean won is crucial for protecting the country’s money.

Moreover, they argue that local crypto markets rely too heavily on stablecoins tied to the U.S. dollar, such as USDT and USDC. They say that the continued use of these foreign stablecoins could harm the effectiveness of domestic financial policies.

South Korea Banks Launched Won-backed Stablecoin

CoinTab reported on June 25th that eight central South Korean banks are working together to launch a stablecoin backed by the South Korean won. This new digital currency aims to provide a more stable option for users.

This project, a collaboration among the banks, the Open Blockchain and DID Association, and the Financial Settlement Institute, represents a significant step forward for South Korea’s financial industry.

This marks the first time the banking sector has collectively entered the digital asset space. Sam Seo from the Kaia DLT Foundation suggested that this stablecoin could serve as another payment option, similar to bank transfers or currency exchanges.

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