Banks in South Korea Shift Focus from CBDC to Stablecoins

South Korea’s digital currency roadmap may be taking a new direction as the country’s central bank pauses its CBDC testing program. The decision appears to reflect growing interest in local stablecoins and uncertainty around the cost and benefits of pushing forward with a state-issued digital won.

Good to know

• CBDC testing in South Korea has been paused after completing its first phase.
• Several banks are shifting focus to launching their own stablecoins.
• President Lee Jae-myung’s party introduced a bill supporting company-issued stablecoins.

The Bank of Korea has told banks involved in its central bank digital currency trials that the next phase of testing is being postponed. This update follows the completion of the first test phase, which ran from April to June and included 100,000 users making payment transactions with the digital currency.

The next round was scheduled for later this year, but reports from Yonhap and The Chosun Daily indicate that the central bank is delaying the timeline. The government’s support for Korean-won-backed stablecoins is one reason for the shift. Officials are now waiting to see how the newly proposed stablecoin framework fits with the idea of a national CBDC.

President Lee Jae-myung, elected earlier this year, campaigned on a crypto-friendly platform. His administration recently introduced a bill that would allow companies to issue stablecoins with a minimum equity capital of ₩500 million (about $370,000). That bill has sparked momentum among banks to explore their own tokens.

One official involved in the CBDC trials said the second stage was “on the verge of collapse.” Several participating banks reportedly objected to the high cost of the program and the lack of a clear commercialization path for the central bank’s digital currency.

While the Bank of Korea has suggested rescheduling the second round of tests to early next year, it may also scale back the number of banks involved. Among the seven banks that joined the first trial, four — KB Kookmin, Shinhan, Woori, and NongHyup — are already forming a separate group to issue a won-backed stablecoin by 2026.

The first phase of CBDC testing involved limited payment functionality. The next round would have added more merchants and remittance use cases. However, banks are now eyeing private stablecoin development instead, where they see clearer paths to profit and faster rollout potential.

Shares in local fintech firms dropped after news broke of the CBDC test suspension and the pivot toward bank-led stablecoins. The move highlights a broader shift in South Korea’s digital currency strategy and a growing divide between public infrastructure and private innovation.