The Bank of Korea (BOK) has announced a temporary pause to its central bank digital currency (CBDC) pilot program, halting ongoing discussions with local banks. The government is reevaluating its approach to the digital currency landscape, which the BOK has been testing in partnership with private companies like Kakao.
As per the reports, the central bank has suspended preparations for the second phase of its digital currency testing initiative, which was originally slated to begin in the fourth quarter of this year.
The move comes as South Korea’s newly elected president, Lee Jae Myung, places a growing emphasis on stablecoins as a central focus of national financial policy. President Lee, who assumed office earlier this month, is pushing for broader corporate participation in stablecoin issuance.
Lee has worked to enable a wide variety of businesses to participate in stablecoins. The ruling party has proposed a bill that would permit companies with equity as little as 500 million won ($370,000) to create stablecoins based on won.
Last week, BOK Senior Deputy Governor Ryoo Sangdai stated that any stablecoin introduction should be carried out gradually, under the supervision of registered institutions, and with measures in place to protect customers and avoid market disruption.
With more than a third of its population actively participating in digital asset exchanges, South Korea is a prominent center for cryptocurrency activity. Local cryptocurrency exchanges frequently see higher trading volumes than Kospi and Kosdaq, the nation’s primary stock indexes.
Recently, South Korea’s top bank moved towards a stablecoin consortium. In an effort to create a national stablecoin consortium supported by the top financial institutions in the nation, KB Kookmin Bank, the biggest bank in South Korea, has submitted 17 trademark applications pertaining to stablecoins.
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