"Bank of Korea, Second Digital Currency Test 'Temporarily Postponed'"

It has been reported that the second phase of the Central Bank Digital Currency (CBDC) experiment, which was being promoted by the Bank of Korea, has been temporarily postponed.

According to industry sources on the 29th, the Bank of Korea notified banks that participated in the first round of CBDC testing in a remote meeting held on the 26th that discussions on the second test would be suspended and put on hold for the time being. It is also reported that the Digital Currency Laboratory, the organization that had overseen the previous experiment, is scheduled to be reorganized in the near future.

Initially, the Bank of Korea had planned to proceed with a second experiment around the end of the year, considering expanding remittance/payment merchants and simplifying authentication. However, it has been reported that banks expressed concerns about the lack of a concrete long-term commercialization roadmap and the burden of costs. In addition, with rapid discussions on stablecoin issuance taking place in both the National Assembly and the private sector, there appears to be a need within the Bank of Korea to reschedule the CBDC project timeline.

The CBDC real-use test involves the Bank of Korea issuing an institutional digital currency, with commercial banks circulating deposit tokens based on it. Consumers participate in practical payments using these tokens. The Bank of Korea and seven banks have been conducting a first-round test involving about 100,000 financial consumers since April, and it is scheduled to be completed by the end of this month.

Meanwhile, as the CBDC experiment has been temporarily suspended, there are observations that banks may increase their focus on stablecoin businesses internally. It is known that some banks are already discussing the issuance of their own stablecoins in collaboration with non-banking sector institutions.