Bank of Korea's CBDC Project Hits a Pause

The Bank of Korea has temporarily halted its Central Bank Digital Currency (CBDC) initiative, 'Project Han River,' just as it was about to enter its second testing phase. This move comes amidst rising interest in won-based stablecoins within the private sector, sparking debates on the future of digital currencies in South Korea.

Stablecoins Gain Momentum

With the government's announcement of plans to introduce a 'won stablecoin,' major banks and financial institutions are rapidly adjusting their strategies. A consortium involving KB, Shinhan, and other leading banks is exploring stablecoin issuance, signaling a significant shift towards private-sector-led digital finance solutions.

Coexistence of CBDCs and Stablecoins?

Experts suggest that CBDCs and stablecoins could function in parallel, leveraging the same or compatible infrastructure. This approach, already seen in Hong Kong, offers a balanced path forward, combining the public good nature of CBDCs with the flexibility of private stablecoins.

Looking Ahead

As South Korea navigates this transition, the focus is on establishing clear legal frameworks and ensuring interoperability between different digital currency platforms. The outcome of these developments will undoubtedly influence the country's financial landscape and its position in the global digital economy.