The Bank of Korea (BOK) has just suspended the central bank digital currency (CBDC) project after President Lee Jae Myung strongly promoted the issuance of a stablecoin backed by the won. This decision reflects an important strategic shift as the domestic stablecoin market develops rapidly, particularly stablecoins linked to the won to limit capital outflow. The Hangang CBDC project had been piloted with the participation of seven major banks, attracting 100,000 users to make payments at retail points but is currently temporarily postponed to carefully consider the integration of CBDC with stablecoins and bank deposit tokens, while awaiting clear legal regulations. This shows that the BOK is cautious to ensure safety, efficiency, and alignment with the development of digital finance in the increasingly vibrant cryptocurrency market in South Korea.
Hangang Central Bank Digital Currency Project and the Decision to Suspend
The Hangang CBDC project was initiated by the Bank of Korea to test the issue of official cryptocurrency for the public to use in daily payments. The program involves close cooperation from seven major banks and mobilizes 100,000 citizens to participate, helping to pilot the application of CBDC in direct payments at local stores.
However, just after nearly three months of testing, the BOK announced the suspension of the plan to implement the second phase of the project while reviewing existing difficulties. Participating banks have invested an average of 3.7 million USD in the project but have no clear roadmap to upgrade to an official system. The postponement is seen as a cautious step to further consider the legal framework and regulatory policies regarding cryptocurrencies and stablecoins.
The central bank also emphasized the need to clearly understand how CBDC will work in conjunction with stablecoins and bank deposit tokens in the future, avoiding conflicts or potential risks that could affect the national financial system.
President Lee Jae Myung's vision for the won stablecoin
President Lee Jae Myung has publicly supported the plan to issue a stablecoin backed by the won to boost the domestic cryptocurrency market while preventing capital outflow to international stablecoins. This facilitates major tech companies and domestic banks to develop a stable, transparent, and tightly regulated stablecoin ecosystem.
Lee Jae Myung's policy focuses on building a clear legal framework through the bill proposed by lawmaker Min Byeong-deok, which includes a licensing and regulatory system for stablecoin issuers. This is an important step to protect user rights while creating a favorable environment for the development of legitimate cryptocurrencies.
This event quickly attracted attention from leading tech corporations like Naver and Kakao as they registered stablecoin trademarks linked to mobile payment services, marking a robust development of the domestic digital financial market.
The role of banks and financial institutions in stablecoin development
In addition to IT companies, many major banks in South Korea are also actively participating in the stablecoin sector. According to reports, at least eight banks are researching the establishment of joint ventures to issue stablecoins based on the won, as part of a broader strategy to leverage technological advantages and expand digital financial services.
The Bank of Korea expresses a positive view on stablecoins, especially when there are strict risk protection measures in place. Governor Lee Chang-yong emphasized the growth potential of this asset in the market while committing to oversight to ensure financial safety and system stability.
This trend reflects a global trend as many countries, including the United States, are also building legal frameworks for stablecoins to unlock the potential for cryptocurrency development within strict legal boundaries.
The cryptocurrency market in South Korea and future forecasts
South Korea is currently one of the most vibrant cryptocurrency markets in the world, with over 20% of the population owning and trading cryptocurrencies by the end of last year. This development has led to diverse demands for transaction forms and convenient, transparent cryptocurrency solutions, in which stablecoins play a key role.
The integration of stablecoins with CBDC and bank deposit tokens promises to create a balanced DeFi – CeFi ecosystem, ensuring liquidity and sustainable scalability for the digital economy.
However, regulators and financial institutions need to continue to coordinate to finalize the legal framework, ensuring transparency, safety, and alignment with the latest technological trends, helping South Korea maintain its leading position on the global cryptocurrency map.
Source: https://tintucbitcoin.com/ngan-hang-han-uu-tien-stablecoin-won/
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