South Korea Puts CBDC on Hold as Government Pushes Stablecoins

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South Korea’s central bank has suspended its digital currency trials as the government shifts focus toward embracing private stablecoins.

Local media reported Monday that the Bank of Korea paused its CBDC pilot, which launched in April, delaying the next phase indefinitely.

The decision comes as President Lee Jae-myung’s administration moves to legalize won-pegged stablecoins—a key campaign pledge.

A banking official involved in the tests told Yonhap that regulators are reevaluating how a state-backed digital currency would interact with private stablecoins.

The ruling party recently introduced legislation allowing companies to issue stablecoins with a minimum capital requirement of 500 million won ($370,000). However, the CBDC trials faced resistance from banks due to high operational costs, with one insider calling the project nearly “collapsed.”