A recent Bloomberg report, referencing a confidential source within the Bank of Korea, reports that the country’s top bank has put the next phase of its central bank digital currency (CBDC) testing on hold. The phase was originally expected to roll out in late 2025. The central bank has notified participating financial institutions that discussions surrounding the next phase will be put on hold for now.
The halt comes as South Korean regulators shift attention toward regulating privately issued stablecoins.
The Bank of Korea launched the first stage of its pilot, called “Project Han River,” in collaboration with seven major banks. The next phase was supposed to explore real-world uses, including merchant transactions and peer-to-peer transfers. However, some banks expressed concerns about the high implementation costs and the lack of a clear plan to introduce the currency into the market. These concerns have pushed the central bank to step back and reassess.
In the meantime, efforts are underway to establish a legal structure for stablecoins tied to the Korean won. The initiative is part of a broader digital finance bill—the Digital Asset Basic Act—which aims to set up a licensing system for stablecoin issuers. The bill includes guidelines for managing reserves and protecting users.
The policy shift also aligns with President Lee Jae-myung’s financial strategy. Since assuming office in June, Lee has pushed to make won-backed stablecoins a pillar of South Korea’s digital economy. His government supports a system that would allow firms with equity as low as $370,000 (₩500 million) to issue stablecoins, provided they meet regulatory standards.
Leaders of the Democratic Party see the move as critical for maintaining control over South Korea’s financial system. They argue that too much of the country’s crypto market depends on USD-backed stablecoins like USDC and USDT.
These foreign-issued tokens generated over $42 billion (₩57 trillion) in trading volume in just the first three months of 2025. Lawmakers warn that such a level of reliance could eventually weaken domestic monetary policy.
Korea’s Digital Asset Committee chair, Min Byeong-deok, has cautioned that without swift regulatory changes, the country risks falling behind in the global stablecoin landscape. He believes the stablecoin sector could rival other key industries like AI and semiconductors in strategic importance.
Reacting to the policy shift, eight major South Korean banks, including Shinhan, KB Kookmin, Nonghyup, and Woori, have come together to develop and launch a Korean won-based stablecoin.
Players in the crypto industry, such as Bit Mining Ltd. (NYSE: BTCM), will be watching how the blockchain landscape shapes up in South Korea as that could have ramifications upon the trajectory of the global crypto industry.
About CryptoCurrencyWire
CryptoCurrencyWire (“CCW”) is a specialized communications platform with a focus on blockchain and the cryptocurrency sector. It is one of 70+ brands within the Dynamic Brand Portfolio @ IBN that delivers: (1) access to a vast network of wire solutions via InvestorWire to efficiently and effectively reach a myriad of target markets, demographics and diverse industries; (2) article and editorial syndication to 5,000+ outlets; (3) enhanced press release enhancement to ensure maximum impact; (4) social media distribution via IBN to millions of social media followers; and (5) a full array of tailored corporate communications solutions. With broad reach and a seasoned team of contributing journalists and writers, CCW is uniquely positioned to best serve private and public companies that want to reach a wide audience of investors, influencers, consumers, journalists and the general public. By cutting through the overload of information in today’s market, CCW brings its clients unparalleled recognition and brand awareness. CCW is where breaking news, insightful content and actionable information converge.
To receive SMS alerts from CryptoCurrencyWire, text “CRYPTO” to 888-902-4192 (U.S. Mobile Phones Only)
For more information, please visit https://www.CryptoCurrencyWire.com
Please see full terms of use and disclaimers on the CryptoCurrencyWire website applicable to all content provided by CCW, wherever published or re-published: https://www.CryptoCurrencyWire.com/Disclaimer
CryptoCurrencyWire
New York, NY
www.CryptoCurrencyWire.com
212.994.9818 Office
Editor@CryptoCurrencyWire.com
CryptoCurrencyWire is powered by IBN
