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Lawmakers Shift Focus to Stablecoin Regulation, Halting Bank of Korea's CBDC Project

The Bank of Korea (BOK) has suspended its Central Bank Digital Currency (CBDC) project amid a growing emphasis on stablecoin regulation by South Korean lawmakers.

This halt impacts the Han River Project, affecting banks that were set to participate in the second phase of CBDC testing.

Concerns over the high costs and lack of a clear commercialization roadmap prompted banks to intervene, leading to the suspension.

BOK officials have acknowledged the need to clarify their stance on digital assets, especially as discussions around stablecoin legalization intensify.

With the prospect of revisiting CBDC testing projected for 2026, the banking sector is now pivoting towards stablecoin issuance in light of forthcoming legislation.

A proposal for a comprehensive Digital Assets Basic Act aims to establish a regulatory framework that includes a licensing system for stablecoin issuers.

Banks are exploring partnerships with both fellow banks and non-bank entities to collaborate on the issuance of stablecoins.

The ambiguity surrounding whether banks or tech firms will lead stablecoin issuance drives them to prepare for various scenarios pre-legalization.

Moreover, officials emphasize the importance of working alongside fintech companies to enhance scalability and align strategies for stablecoin deployment.

As the situation evolves, the BOK remains vigilant, awaiting developments in the regulatory landscape for stablecoins and digital currencies.