SEOUL: South Korea’s central bank halted its digital currency testing project, telling participating banks it will temporarily pause discussions related to the initiative.
The Bank of Korea (BOK) has temporarily suspended preparations for the second phase of its pilot initiative testing programme for a central bank digital currency which had been scheduled for the fourth quarter, a BOK official told Bloomberg News.
The decision comes as the trajectory of the market for stablecoins has emerged as a key agenda item for South Korean President Lee Jae Myung, who took office earlier this month.
Lee has sought to make it possible for a broad range of companies to get involved in stablecoins. A proposed bill by the ruling party would allow firms with equity as low as 500 million won (US$370,000) to issue won-based stablecoins.
BOK Senior Deputy Governor Ryoo Sangdai last week said that any introduction of stablecoins should be done in stages and led by regulated banks, with safeguards to prevent market disruption and to protect consumers.
South Korea has one of the world’s most active digital-asset markets, which has driven massive gains in shares of companies linked to stablecoins.
South Korea is already a hotbed for crypto activity. More than a third of the population, or around 18 million people, are active in digital-asset markets. On some days, trading volume on local crypto exchanges surpasses turnover on the Kospi and Kosdaq stock indexes. – Bloomberg