Michaela
The Bank of Korea has reportedly hit pause on its CBDC trials, as local lenders pivot toward stablecoins amid shifting regulatory signals. The halt marks a potential turning point in the nation’s evolving fintech strategy.
The Bank of Korea informed participating financial institutions that it is temporarily halting its CBDC trials, putting the next phase of testing on hold. The announcement, made on June 29, affects the second round of trials that had been scheduled to roll out later this year. The pilot, which began in April, was part of South Korea’s broader exploration into a potential state-backed digital currency.
A senior executive from one of the seven banks involved in South Korea’s CBDC trials told local outlet Yonhap that the Bank of Korea is pausing to assess how its digital currency initiative would align with the government’s evolving stance on stablecoins. The central bank is reportedly awaiting clearer policy direction before proceeding with further testing.
“The Bank of Korea’s explanation is that since the legislation of stablecoins is currently in progress while it is not clear how CBDC, stablecoins, and deposit tokens differ and can coexist, they will wait and see how the situation develops,” a senior official at a commercial bank said. “The Bank of Korea has decided to hold off because there is great uncertainty and banks are having a hard time,” the senior official added.
A separate senior banking official noted that as momentum builds around stablecoin discussions and sentiment shifts in their favor, the Bank of Korea appears to be recalibrating its approach to digital currency development.
“This atmosphere wasn’t there until the dinner between Bank of Korea Governor Lee Chang-yong and bank presidents on the 23rd, but the situation has changed significantly since then, and the second CBDC test has been temporarily put on hold,” the senior banking official added.
Another banking official stated that the “second experiment of the Han River Project is virtually on the verge of collapse,” adding that the Bank of Korea has mentioned the possibility of revisiting and advancing the initiative in the first half of next year. The official also noted that some participating financial institutions have raised concerns about the delay.
The temporary pause emphasizes the uncertainty surrounding South Korea’s digital currency roadmap, as regulators, banks, and lawmakers navigate a rapidly evolving financial landscape. Whether the central bank digital currency (CBDC) project regains momentum will likely depend on how the government ultimately balances innovation with market stability in its broader digital asset strategy.
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Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
