TheBlock
South Korea's central bank is advancing its CBDC pilot to a second phase that integrates deposit tokens into existing banking systems for real-world use, according to a report on the initiative.
Why it matters
The move takes the project past a sandbox and into production-style bank infrastructure, a step most major economies have not taken. The U.S. has publicly ruled out issuing a retail CBDC, leaving a regulatory gap that tokenized bank deposits and stablecoins are racing to fill. South Korea's deposit token model, which runs on a unified ledger and is issued by commercial banks rather than the central bank directly, is one of the clearest live tests of that approach globally.
Market impact
For stablecoin issuers and tokenization projects, the read is competitive: regulated bank-issued deposit tokens operating inside a central bank framework are the same use case stablecoins pitch, with full KYC and reserve backing by default. Watch for whether the Korean model gets referenced as a template by other Asia-Pacific regulators, and how cross-border settlement pilots that pair CBDC rails with tokenized commercial bank money evolve over the next two quarters.
Frequently asked questions
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What is the Bank of Korea's CBDC deposit token pilot moving to phase 2?
South Korea's central bank is advancing its CBDC pilot into a second phase that integrates deposit tokens into existing banking systems for real-world testing, moving past a controlled sandbox and into production-style infrastructure.
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How does South Korea's deposit token model differ from a retail CBDC?
In the Korean model, commercial banks issue the deposit tokens on a unified ledger rather than the central bank issuing digital currency directly to consumers. It is a tokenized bank-money approach, not a central bank liability held by the public.
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Why is the US position on CBDCs relevant to this story?
The US has publicly ruled out issuing a retail CBDC, which leaves tokenized bank deposits and stablecoins as the main paths to digital money in the US market. That makes foreign deposit-token pilots competitively important for US-based stablecoin issuers.
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What does this mean for stablecoin issuers?
A regulated, bank-issued deposit token operating inside a central bank framework competes directly with stablecoins on the same use cases, with full KYC and reserve backing built in by default. It raises the bar regulated stablecoins will be measured against.
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What should investors watch next in tokenized bank money?
Whether Asia-Pacific regulators cite the Korean model as a reference design, and how cross-border settlement pilots that pair CBDC rails with tokenized commercial bank money progress over the next two quarters.
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