South Korea’s central bank has announced a temporary suspension of its digital currency pilot project, signaling a pause in digital currency development as policy focus shifts to the future of stablecoins under the nation’s new administration.
The Bank of Korea (BOK) was set to begin phase two of its digital currency testing initiative in the fourth quarter, but preparations have now been put on ice, officials said. The decision coincides with President Lee Jae Myung’s first month in office.
President Lee has prioritized broadening access to stablecoins, with the ruling party pushing legislation that would allow firms with as little as 500 million won in equity to issue won-backed stablecoins.
Senior BOK Deputy Governor Ryoo Sangdai recently called for a measured rollout of stablecoins, emphasizing the need for a staged approach led by regulated financial institutions. He highlighted the importance of consumer protection and the necessity to avoid market turbulence.
The pause comes as digital asset activity in South Korea continues to boom. An estimated 18 million South Koreans—more than a third of the population—are actively trading digital assets, with daily transaction volumes on crypto exchanges often outpacing those of the country’s main equity indices, the Kospi and Kosdaq.
