The Bank of Korea has announced a temporary suspension of preparations for the second phase of its central bank digital currency (CBDC) pilot, dubbed “Project Han River,” originally scheduled for Q4 2025. This decision follows escalating concerns from participating banks and a surge of interest in won‑pegged stablecoins .
Banks Resist, Stablecoin Talks Heat Up
Banks involved in the initial CBDC trial—which concluded on June 30 with around 100,000 participants using the digital won—reportedly raised alarms over high implementation costs and a lack of a clear path to commercialization . A senior banker told Cointelegraph that the second phase was “on the verge of collapse” due to these concerns .
At the same time, momentum is building behind the idea of won‑backed stablecoins. A bill in the National Assembly under the newly elected administration of President Lee Jae‑myung would permit companies with as little as KRW 500 million (≈ $370,000) in equity to issue these tokens.
Strategic Pivot in Digital Currency Policy
Bank of Korea officials—citing Bloomberg and other media—confirm the pause is intended to evaluate how a central‑bank‑issued digital currency would coexist with private stablecoins . Senior deputy governor Ryoo Sangdai emphasized that any introduction of stablecoins would be phased and bank‑led, under a controlled regulatory framework .
Governor Rhee Chang‑Yong has also voiced support for cautiously regulated, bank‐issued stablecoins .
Industry Response and Future Outlook
Banks pivot to stablecoins — Major banks, including KB Kookmin, Shinhan, Woori, and NongHyup, are collaborating to launch won‑backed stablecoins, prioritizing them over further CBDC trials .
Policy alignment – The shift reflects President Lee’s broader agenda to incorporate stablecoin innovation as a tool for modernizing Korea’s financial landscape .
Global precedent — South Korea’s move mirrors trends in other countries where regulators are cautious toward CBDCs but open to private stablecoin frameworks (e.g., U.S. GENIUS Act; Hong Kong; Taiwan) .
What’s Next for CBDC?
Timing of the second test remains uncertain: it may be delayed into 2026 and include fewer banks, depending on how stablecoin legislation evolves .
Legislative progress on the Digital Asset Basic Act will be closely watched—it’s expected to define licensing, reserve management, and consumer protections for won‑denominated stablecoins .
Future CBDC integration may hinge on whether the Bank of Korea can clarify how it complements private stablecoins rather than competing with them.
