The Financial institution of Korea (BOK) has reportedly halted its Central Financial institution Digital Foreign money (CBDC) undertaking following the South Korean authorities’s deal with stablecoins. The shift has left undertaking members with “no long-term roadmap” and banks pivoting to this sector.
BOK Suspends Second Part Of CBDC Testing
On Sunday, native information outlet Yonhap Information Company reported that the Financial institution of Korea had notified banks collaborating within the Han River Mission that the second part of CBDC testing could be suspended.
The BOK and 7 banks started the primary part of testing in April, concentrating on 100,000 monetary customers and planning to finish it by June 30. Initially, the undertaking was scheduled to begin its second part on the finish of the 12 months, testing peer-to-peer transfers, increasing fee service provider places, and simplifying authentication strategies.
Nonetheless, banks reportedly raised considerations concerning the “extreme price burden with out concrete plans for commercialization,” resulting in the undertaking’s pause. Notably, the banking sector is bearing the price of the undertaking and just lately demanded that the Financial institution of Korea present a transparent long-term roadmap with plans for commercialization.
Banks requested the BOK to “set up a ‘CBDC Basic Person Actual-Transaction Take a look at Activity Pressure’ involving all related departments of the Financial institution of Korea and banks to develop a long-term roadmap together with post-test commercialization plans, after which realistically alter the undertaking schedule based mostly on this roadmap.”
Consequently, the BOK has concluded that it should make clear its inner stance and schedule relating to digital property, as stablecoin momentum grows and discussions within the Nationwide Meeting and the non-public sector intensify.
In line with a senior official at a business financial institution, the Financial institution of Korea defined that it could “wait and see how the scenario develops, provided that the legalization of stablecoins is at present underway, whereas it’s unclear how CBDC, stablecoins, and deposit tokens differ and may coexist.”
Equally, one other senior official affirmed that the environment is shifting towards stablecoins, detailing that “Till the dinner assembly between Financial institution of Korea Governor Lee Chang-yong and financial institution presidents on the twenty third, the environment was not like this, however the scenario has modified considerably since then.”
Nonetheless, the Han River Mission could possibly be reconsidered in 2026, in response to one other financial institution official, who claimed that the Financial institution of Korea talked about the opportunity of revisiting CBDC testing and “pushing ahead with it across the first half of subsequent 12 months.”
Banks Put together For Stablecoin Laws
Following this growth, banks collaborating within the CBDC undertaking are anticipated to shift to stablecoin issuance as associated laws beneficial properties help, making ready for issuance with different banks or non-bank entities.
Firstly of the month, a member of South Korea’s ruling celebration, Min Byeong-deok, launched a complete invoice to determine a extra structured regulatory framework for crypto property within the nation.
As reported by Bitcoinist, the Democratic Social gathering of Korea (DPK) lawmaker proposed the Digital Property Primary Act to enrich the Digital Asset Investor Safety Act and provide a broader authorized basis for the business. Moreover, it focuses on implementing a licensing system for stablecoin issuers and clear guidelines.
The banking sector is contemplating a enterprise mannequin through which banks set up a three way partnership to collectively problem stablecoins, whereas contacting numerous non-bank corporations to arrange for the legalization and issuance of stablecoins.
A financial institution official affirmed that “It’s unclear whether or not banks or massive tech (massive IT corporations) and fintech (monetary know-how corporations) would be the issuers of stablecoins,” including that they “haven’t any selection however to arrange for each situations earlier than legalization.”
One other financial institution official acknowledged that it’s essential to collaborate with fintech corporations for scalability, explaining that banks are “not solely discussing stablecoins with the Financial institution of Korea and different banks, but in addition assembly repeatedly with ‘fee’ corporations, cryptocurrency exchanges, and blockchain corporations to arrange for the issuance of stablecoins.”
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