Bank of Korea Halts Central Bank Digital Currency Project Discussions

The Bank of Korea (BOK) has suspended its Central Bank Digital Currency (CBDC) project, halting discussions and ending plans for a pilot program with participating banks.

Key Points on CBDC Suspension

• The BOK decided to pause the CBDC initiative after advancing to pilot development.
• All discussions regarding the project are officially halted; no second testing phase will occur.
• Participating businesses like 7-Eleven were set to test CBDC use from April to June, offering discounts to customers.
• The Korean government is focusing more on local currency stablecoins rather than a national digital currency.

Stablecoin Developments in South Korea

• Eight major banks are collaborating to launch a won-pegged stablecoin, including KB Kookmin and Shinhan.
• Concerns exist over stablecoins potentially undermining the central bank's control of the won.
• Regulatory measures are emphasized, with a gradual rollout led by banks under financial regulation.

Legislative Actions

• A new bill aimed at regulating stablecoins was introduced by lawmaker Min Seok.
• The Digital Asset Basic Act proposes a licensing regime aligned with current cryptocurrency laws.