South Korea has put its retail central bank digital currency (CBDC) test on hold due to legal uncertainties but signaled it may revisit the project in the future, with Bank of Korea Governor Lee Chang-yong stressing the long-term need for digital currency. In the meantime, momentum is shifting toward stablecoins. Eight major South Korean banks plan to launch a won-pegged stablecoin by 2025 to 2026, with central bank officials supporting banks as the primary issuers before expanding to other sectors.

Adding to this push, top financial groups including Shinhan, Hana, KB Financial, and Woori Bank are holding talks with Tether and Circle, issuers of USDT and USDC, to explore partnerships for dollar-pegged stablecoins and a potential won-based token. The initiative aligns with President Lee Jae Myung’s pro-crypto agenda, which prioritizes developing a stablecoin market over issuing a CBDC. Meanwhile, major exchange Upbit is already working with Naver Pay on its own stablecoin, signaling intensifying competition in South Korea’s digital payments ecosystem.