The Bank of Korea is reportedly suspending its digital currency program amid increased stablecoin enthusiasm.
The central bank (BOK) has paused preparations for the next phase of its digital won program, Bloomberg News reported Monday (June 30), citing comments from a bank official.
According to Bloomberg, the decision is happening as the stablecoin market has become a prominent item on the agenda of new South Korean President Lee Jae Myung, who wants to allow a wide range of companies to get involved with stablecoins.
Proposed legislation in South Korea would let businesses with equity as low as 500 million won ($370,000) to issue won-based stablecoins.
The report notes that the BOK’s move is in line with rising skepticism among central banks about the need for central bank digital currencies (CBDCs), while also pushing for rules to make sure stablecoins don’t cause financial disruption.
Earlier this month, the U.S. Senate passed a bill creating a regulatory framework for dollar-backed stablecoins, while Hong Kong and Taiwan are the jurisdictions in Asia exploring rules for stablecoins.
The Bloomberg report points out that at a recent an international conference hosted by the BOK, Federal Reserve Governor Christopher Waller argued that stablecoins create an opportunity for nonbanks to enter the payments sector, creating competition for banks that could lower costs.
The report comes days after a BOK official called for won-pegged stablecoins to be rolled out gradually, starting with strictly regulated commercial banks.
“It is desirable to first allow banks, which are under a high level of regulations, to issue (won-based stablecoins) and gradually expand to the non-bank sector with the experience,” said Ryoo Sang-dai, the BOK’s senior deputy governor, whose comments at a press conference were reported by Reuters.
At the same time, not every banking institution is totally on board with stablecoins, as covered here last week. For example, the newly published Bank for International Settlements Annual Economic Report 2025 includes a chapter which argues that stablecoins “perform poorly” as a form of sound money.
“The document argued that most stablecoins fail critical criteria for a currency, such as price stability, universal acceptability and trust. It also pointed to the fact that stablecoins are frequently exploited by criminals and lack the elasticity of credit that underpins modern financial systems,” PYMNTS wrote.
