The Bank of Korea suspended its central bank digital currency project ("Project Han River") in October 2025, before the planned second pilot phase. The decision came amid growing dissatisfaction among participating banks and active private-sector demand for a won-backed stablecoin alternative.
Private Sector Alternative
Seven major banks - KB Kookmin, Shinhan, Woori, NongHyup, IBK, Suhyup, and Standard Chartered Korea - formed a consortium to issue a won-backed stablecoin, targeting late 2025 or early 2026 launch. The Financial Services Commission's Digital Asset Phase 2 legislation, expected Q1 2026, will establish stablecoin issuance rules.
Government Adoption Plans
Despite the CBDC halt, South Korea is proceeding with deposit token pilots. From 2030, deposit tokens are planned for approximately 25% of national treasury payments, with a pilot for EV charging subsidies planned for H1 2026.
Why This Matters
South Korea is one of the most digitally advanced economies to explicitly choose private stablecoins over a CBDC - a reversal that could influence other central banks weighing similar decisions. The seven-bank consortium represents virtually the entire Korean banking sector, ensuring broad distribution if launched. For payments professionals, this signals that the private sector may move faster than central banks in delivering programmable digital money in some markets.
Sources: The Paypers, Finextra