South Korea Pauses CBDC Plans as Stablecoins Gain Ground

The increase in market penetration and the adoption of Stablecoins have put a shutters on the plans of the South Korean CBDC. The country has applied brakes in its CBDC trial program which was underway since April this year in the wake of Stablecoin rebirth in the midst of political support.

The Bank of Korea (Bok) confirmed the current state of affairs in a declaration given to Bloomberg on 30 June 2025, through a representative.

In addition, a senior representative of one of the seven banks participating in the processes of the South Korean CBDC has informed a local publication that the Central Bank is holding up until he sees the government strategy of the government and how the CBDC could integrate with it.

The South Korean president recently elected Lee Jae -myung openly supported Stablecoins and his administration reported that Stablecoins will hit large gaps in the country’s financial scene.

In his defense for Stablecoins, Jae -myung proposed the admissibility of companies with reserves starting from 500 million $ 370,000) in order to issue Stablecoin.

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However, not everyone is happy with this rapid acceleration in the adoption of Stablecoin in South Korea. Bok officials played the alarm, with the deputy governor Senior Ryoo Sang-Dai who warned the players of the sector against the movement too fast.

He asked for a gradual implementation of Stablecoin guided by banks that take into account the protection of consumers and other measures that will mitigate the interruption of the market.

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The tests of the South Korean CBDC are able to collapse

The local publication reported that banks are not excited to continue the second half of the CBDC tests as they have become disillusioned from the exorbitant cost of the program.

The banks raised their concerns about the matter, stating: “The burden of costs is too high without a specific marketing plan”. In addition, they requested a long -term clear roadmap about it.

About 100,000 participants were involved in the first phase of the South Korean CBDC race, which took place from 1 April 2025 to 30 June 2025, where they tested the CBDC payment infrastructure.

The second phase was intended to expand the number of traders and bring remittances. However, the Bok is taking into consideration the possibility of moving tests from the second half of this year to the beginning of next year, limiting the participation of financial institutions.

It is interesting to note that South Korean banks are eager to issue their Stablecoins since there is a cleatches more clearly that it is more practicable and financially advantageous. Recently, eight of the largest South Korean commercial banks have joined to issue a Stablecoin supported by winning.

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The South Koreans hold 14% of their investments in cryptocurrencies

Over 18 million South Korean residents are involved in the cryptocurrency trade, a significant increase that led to cryptocurrency exchanges overcoming traditional share markets such as Kospi and Kosdaq.

According to a recent survey in the sector, more than half of the South Koreans aged between 20 and 59 years of age exchanged Crypto, with one in four that still holds digital activities. Many manage portfolios in several national exchanges, with cryptocurrencies for at least 14% of their total wallet.

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