Bank of Korea Suspends CBDC Project Amid Stablecoin Legislation

The Bank of Korea has paused its CBDC initiative as the South Korean government proposed stablecoin legislation on June 30, 2025. This decision involves major local banks and seeks to evaluate stablecoins before continuing CBDC efforts.

The Bank of Korea’s decision to suspend its CBDC project may pave the way for stablecoin emergence. It reflects a strategic pivot by South Korea under President Lee Jae-myung‘s leadership to prioritize regulatory advances over CBDC initiatives.

Bank of Korea has officially ceased its CBDC project activities following a governmental proposal that supports a regulated stablecoin market. This shift has impacted ongoing collaborations between local banks and businesses, previously engaged in testing the digital won.

Primary players include President Lee Jae-myung and major banks, who face potential losses. With approximately ₩5 billion KRW invested per participating bank, reallocations await clear guidance on Korea’s national crypto policy and regulatory developments.

Involved banks have encountered financial setbacks, halting investments in CBDC pilot programs. An unnamed executive from a major participating bank commented, “The central bank wants to first observe the government’s plans for stablecoins before determining whether a CBDC can coexist with such tokens.” There are no noted impacts on global assets like BTC and ETH as the test operated within a closed network.

Cryptocurrency market movements have remained steady, with limited public blockchain engagement during Korea’s internal stablecoin tests. Historical trends from similar CBDC projects, like those in China and Europe, illustrate domestic impact over global shifts.

Potential financial impacts include potential interest in stablecoins, proposing a more substantial role in Korea’s financial ecosystem. A legislative focus on stablecoins may encourage broader institutional adoption, fostering growth in the local digital asset market.