South Korea Central Bank (BOK) announced that it temporarily stopped the second stage of the digital currency (CBDC) tests. After the first test phase that started in April, the message transmitted to banks was that the year -end tests were postponed.

According to local sources, the decision of the banks is both dissatisfied with high costs and the government’s tendency to support Stablecoins.

🏦 Banks are moving away from the CBDC project

In the tests attended by seven Great South Korean Bank, the Central Bank did not present a concrete commercialization plan was also the subject of criticism. According to the senior official from a bank:

“The second stage of the test has almost collapsed. Participating banks can no longer remove the high cost and uncertain future vision.”

Banks would try payment tests and transmission transactions that cover more businesses in the second phase. However, this stage can be shifted to the first half of 2025. In addition, the limitation of the number of participating financial institutions is on the agenda.

🇰🇷 Stablecoin initiatives accelerated

The newly elected President Lee Jae-Myung has made it clear that he would support stablecoins and crypto-friendly regulations in his election campaign. In this respect, the bill was presented to the parliament that will enable companies to produce at least 500 million WON (~ 370,000 USD) with self -capital.

Following these developments, the banks turned the route to the stablecoin side. According to a report released last week, 8 major Korean Banks are planning to issue a common Stablecoin with Won -supported Stablecoin until 2026.

These banks include both CBDC tests and those involved in the new Stablecoin initiative:

KB KOOKMIN

Shinhan

Woori

Nonghyup

📉 Fluctuation in FinTech shares

Following the suspension of CBDC tests, some Fintech companies in South Korea began with a decline in the week:

Kakaopay Corp: 7 %drop

Hecto Financial: 5 %decrease

KB Financial Group: 0.8 %rise

Shinhan Financial: 1.6 %rise

Investors agree that banks find that stablecoin initiatives are more profitable and applicable.

🎯 EVALUATION

South Korea’s Digital Won project seems to have been attached to the stablecoin wind. Uncertainty and cost concerns in CBDC tests direct banks directly to their own stablecoin initiatives. This may be a harbinger of a period in Korea, one of the most dynamic crypto markets in Asia, a period in which stablecoins can get official approval.