The Bank of Korea has reportedly postponed testing of the Central Bank Digital Currency (CBDC) as the country’s government increasingly supports the local currency stablecoin.
South Korea tells banks to take CBDC tests on Sunday Starting in April It is temporarily suspending and postponing a second round of testing later this year, with local media Yonhap News Agency and Chosun Daily Report exist on Monday.
A senior official from one of the seven banks participating in the test told Yonhap that the central bank is awaiting the government’s stability plan and how the CBDC fits into the token.
Newly elected President Lee Jae-Myung runs Cryptocurrency Listincluding allowing stable share coins to be issued, cryptocurrencies to track the currency prices won by South Korea.
His party proposal Earlier this month, the company could issue a minimum share capital of 500 million Korean won ($370,000).
Banks are not satisfied with expensive CBDC projects
A senior banking official said the second part of the CBDC trial was already “on the brink of collapse” as seven participating banks were unhappy with the costs of participating.
The participating banks reportedly told the South Korean bank that the trial was too expensive and was upset that the central bank did not designate a commercialization plan for the CBDC.
A senior bank official who asked not to be named told Yonhap that South Korea’s bank floated, moving the second half of the year from later this year to the first half of next year, which could limit the number of financial institutions participating.
The first phase of the CBDC test involves testing payments for 100,000 participants using a currency issued by the central bank, which runs from April 1 to June 30, and the second phase will expand the number of merchants and bring in remittances.
Bank of Korea wants stability
Banks reportedly want to focus on issuing their own stablecoins, as there seems to be a clearer way to benefit from such tokens.
Eight South Korean banks reportedly reported Teamwork Launch the winning Stablecoin by next year.
Related: 27% of Koreans aged 20-50 hold cryptocurrencies, and 70% have more investments
Half of the banks participated in Stablecoin – KB Kookmin, Shinhan, Woori and Nonghyup – and also participated in the first phase of the CBDC trial.
South Korean fintech stocks see mixed
Stocks of some South Korean fintech companies fell on Monday after news that CBDC was suspended and banks wanted to focus on stable stakes.
Shares of mobile payment app Kakaopay Corp fell 7% as of 2pm local time, while Payments company Hecto Financial fell about 5%.
KB Financial Group, parent company of KB Kookmin, saw a 0.8% bump, while Shinhan has risen 1.6% so far that day.
Legal Team: Crypto wants to overthrow the bank and is now in a fight at Stablecoin
