₩57 Trillion Surge Pushes South Korea to Prioritize Stablecoins Over CBDC

South Korea’s central bank has put the second phase of its Central Bank Digital Currency (CBDC) pilot on hold to focus on regulating...

Written by: Arslan Butt • Monday, June 30, 2025 • 2 min read

• Last updated: Monday, June 30, 2025

Quick overview

South Korea's central bank has paused its CBDC pilot to prioritize the regulation of won-backed stablecoins due to operational and scalability challenges.
The Digital Asset Basic Act aims to establish a licensing framework for KRW-backed stablecoin issuers, emphasizing consumer protection and reserve requirements.
Eight major commercial banks in South Korea are collaborating to launch a KRW-pegged stablecoin, responding to regulatory expectations and market demand.
This shift from a centralized CBDC to regulated stablecoins positions South Korea to potentially lead in fiat-backed stablecoin adoption in the region.

South Korea’s central bank has put the second phase of its Central Bank Digital Currency (CBDC) pilot on hold to focus on regulating won-backed stablecoins. According to Bloomberg, a Bank of Korea (BoK) official confirmed that the rollout of Project Han River’s next phase—originally set for Q4 2025—has been delayed due to rising operational costs and scalability issues.

The CBDC initiative, launched with seven major banks, was to explore peer-to-peer transfers and merchant payments. However, concerns over efficiency, unclear commercialization paths and pushback from participating banks forced a change of direction.

Instead, South Korea’s monetary authorities are fast-tracking won-denominated stablecoins as a more viable way to digitize its financial infrastructure.

Stablecoin Regulation Takes Center Stage

At the heart of this is the Digital Asset Basic Act, a bill that will establish a licensing framework for KRW-backed stablecoin issuers. To qualify, companies need to have ₩500 million ($370,000) in equity and meet strict reserve and consumer protection requirements.

President Lee Jae-myung has made this a key financial policy. His administration sees locally regulated stablecoins as a way to reduce dependence on foreign digital currencies and preserve monetary sovereignty in a digital economy.

Key Stats and Trends:

₩57 trillion ($42B) in stablecoin volume in Q1 2025
USDT and USDC still dominate in South Korea
Goal: Replace USD-pegged assets with KRW-based alternatives
Policy concern: Foreign stablecoin dominance seen as a risk to financial autonomy

Democratic Party leaders have echoed the urgency, warning that foreign-issued stablecoins pose structural risks to the national economy.

Commercial Banks Lead the Charge

South Korea’s commercial banks aren’t waiting. Eight major banks—including KB Kookmin, Shinhan, Woori and Nonghyup—have announced a joint plan to launch a KRW-pegged stablecoin to meet regulatory expectations and market demand.

This aligns with comments from Min Byeong-deok, head of the Digital Asset Committee, who believes the stablecoin industry could rival the economic size of the semiconductor and AI sectors. He’s calling for immediate legislation to ensure South Korea leads the global tokenized economy.

Outlook

From Centralized Currency to Localized TokenizationBy shelving its CBDC and going with regulated stablecoins, South Korea is moving from centralized digital currency experiments to more market-integrated, bank-driven solutions. This approach is about flexibility and innovation, empowering domestic institutions while controlling digital money flows.

As regulations get clearer, South Korea could be the regional leader in fiat-backed stablecoin adoption—connecting the dots between traditional banking and programmable money.

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ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.