BoK Chief Urges Korean Banks to Back CBDC Pilots in One-on-One Meetings (Image courtesy of Getty Image Bank/CCL)
SEOUL, June 30 (Korea Bizwire) — The Bank of Korea (BOK) has put the second phase of its central bank digital currency (CBDC) pilot program on hold, signaling mounting pressure from commercial banks and a shifting digital finance landscape increasingly shaped by stablecoin developments.
The abrupt pause, disclosed in a virtual meeting with participating banks on June 26, reflects growing discomfort within the financial industry over the unclear commercialization roadmap and mounting costs associated with the CBDC initiative.
The move also comes as lawmakers and private-sector players ramp up efforts to legislate and develop stablecoin infrastructure — challenging the central bank’s digital currency ambitions.
Banks Demand Clarity, Citing High Costs
The BOK had launched its first wholesale CBDC pilot — dubbed the “Hangang Project” — in April, involving seven major commercial banks and roughly 100,000 consumers. The test simulated real-world payments using tokenized central bank money and commercial bank-issued “deposit tokens.”
Initially scheduled for expansion later this year to include peer-to-peer transfers and broader payment use cases, the second phase was expected to proceed with simplified authentication methods and additional merchant integration. However, banks pushed back, citing a lack of regulatory clarity and excessive financial burden.
Each bank reportedly invested between 3 billion to 6 billion won (roughly $2.2–$4.4 million) in infrastructure and marketing for the pilot, totaling an estimated 35 billion won ($25 million) across all participants.
Despite a pledge from BOK Governor Rhee Chang-yong to cover more than half of future testing costs, banks demanded a detailed commercialization plan and long-term roadmap before committing to further trials.
One senior banking official told local media, “We need to see how CBDCs, stablecoins, and deposit tokens differ and coexist — but right now, everything is murky.”
Shift in Strategic Focus
Adding to the uncertainty is South Korea’s accelerating push toward stablecoin legalization. With legislators drafting frameworks and private companies forming alliances, banks are now pivoting toward alternative digital currency models, including consortium-based stablecoin issuance and partnerships with blockchain, fintech, and payment firms.
Though the BOK has long maintained that “deposit tokens” are essentially stablecoins in function — being pegged to fiat currency and issued by regulated institutions — the delay in CBDC development has prompted banks to explore their own paths.
Some are considering joint ventures with blockchain startups, while others are actively collaborating with major tech and fintech players to prepare for a post-regulatory stablecoin market.
The Bank of Korea headquarters in Seoul (Image courtesy of Yonhap)
Internal Realignment at the Central Bank
In response to the pause, the BOK is reportedly restructuring the internal team overseeing CBDC experimentation, shifting responsibility away from its original digital currency lab. Officials say the bank may revisit the pilot in the first half of 2026, focusing only on institutions still interested in participation.
As competition heats up, the fate of a central bank-backed digital currency in South Korea now hinges on whether the BOK can provide strategic clarity in a rapidly evolving ecosystem — one where the private sector may ultimately take the lead in shaping the future of digital money.
M. H. Lee (mhlee@koreabizwire.com)
