South Korea CBDC efforts have been temporarily paused as major commercial banks shift their focus toward stablecoin initiatives. This unexpected move highlights the country’s evolving priorities in the digital currency space, especially as retail and institutional demand for stablecoins continues to surge.
Banks Favor Stablecoins Over State-Issued CBDC
According to a June 28 report by Yonhap News Agency , multiple South Korean banks—including KB Kookmin and Shinhan Bank—have begun prioritizing stablecoin-related research and product development. These efforts are largely being conducted through sandbox programs managed by the Financial Services Commission.
Industry insiders suggest that the flexibility of stablecoins, particularly those backed by tokenized bank deposits, provides a more attractive path for near-term innovation than the rigid architecture of a CBDC. This sentiment has reportedly influenced the Bank of Korea’s decision to delay further stages of its wholesale CBDC pilot.
Stablecoin Demand Surges in South Korea
The shift comes amid a broader surge in stablecoin adoption across South Korea, especially from younger retail users and crypto-savvy institutions. Demand for fast, cost-efficient, and programmable digital assets is pushing local banks to explore new models that combine blockchain infrastructure with traditional financial compliance.
The Korea Federation of Banks has reportedly submitted proposals encourag ing a more “open-ended” regulatory stance on stablecoins, noting their potential for cross-border payments, remittances, and programmable finance.
South Koorea CBDC : Still Part of Long-Term Strategy
Despite the temporary halt, the Bank of Korea clarified that its CBDC program is not being abandoned. Officials emphasized that future tests could resume depending on how the stablecoin ecosystem evolves and whether it introduces systemic risks or gaps in monetary control.
The government is also monitoring stablecoin developments globally, including MiCA regulation in the EU and ongoing pilots by the Federal Reserve and Bank of Japan.
