🚨 Bank of Korea Digital Currency Test: 21 Billion Won Spent, 80,000 Digital Wallets Created, Stablecoin Competition Expected

Today Korean Economic News | 2025.07.02

📌 Bank of Korea Spends Huge Marketing Budget on CBDC Test…Financial Sector Stablecoin Competition Begins

💬 The Bank of Korea announced on July 2nd that it spent about 21 billion won on marketing for its central bank digital currency (CBDC) experiment called "Deposit Token" from April to June. During the 3-month test period, about 80,000 digital wallets were created, costing about 260,000 won to attract each wallet user. This suggests that intense marketing competition will happen among financial institutions in the Korean won-based stablecoin market. Kakao Bank and Kookmin Bank have already applied for 'KRW' trademarks to prepare for market competition. Industry experts expect various customer benefits beyond discount coupons, including interest payments on deposits.

1️⃣ Easy Explanation

The Bank of Korea tested digital money and found it cost more money and effort than expected. Banks are expected to compete fiercely to attract customers with digital currency services.

First, let me explain what 'Central Bank Digital Currency (CBDC)' means. This is digital money issued by the Bank of Korea. It has the same value as the cash we use now, but exists in digital form instead of paper bills or coins. It's similar to money in KakaoPay or Toss apps, but the difference is that the government issues it directly, not private companies.

The Bank of Korea tested whether this digital money could actually work by running a 3-month experiment called "Deposit Token." This experiment cost 21 billion won in marketing, and 80,000 people created digital wallets. This means it cost about 260,000 won per person.

This number is important because it shows how much marketing money banks will need to spend when they launch similar services. Kakao Bank and Kookmin Bank have already applied for 'KRW' (Korean Won) trademarks. This shows they are preparing their own digital currency services.

In the future, banks are expected to offer various benefits to attract customers. Beyond simple discount coupons, they might offer interest on money kept in digital wallets or give points every time you make a payment.

However, it's not confirmed yet when digital currency will officially launch. The Bank of Korea continues testing to check safety and usefulness.

This experiment shows the possibility of digital money we might use in the future, while also predicting a new era of competition among banks.

2️⃣ Economic Terms

📕 Central Bank Digital Currency (CBDC)

CBDC stands for Central Bank Digital Currency, which is digital money issued by central banks.

• It has the same legal status as cash but exists in digital form.
• Unlike private digital currencies, it's safe digital money issued and guaranteed by the government.
• Many countries worldwide are researching and developing CBDCs, and China is already testing digital yuan.

📕 Stablecoin

A stablecoin is a cryptocurrency designed to minimize price changes.

• It's linked 1:1 to regular currencies like dollars or Korean won, keeping its value stable.
• It keeps the technical advantages of cryptocurrency while solving the price change problem.
• Tether (USDT) and USD Coin (USDC) are popular stablecoins.

📕 Digital Wallet

A digital wallet is software that can store and manage digital money.

• It comes as smartphone apps or computer programs.
• It provides functions like sending, receiving, and checking balances of digital money.
• Security is very important, and private keys must be kept safe.

📕 Deposit Token

A deposit token is a digitized form of bank deposits using blockchain technology.

• It has the same value as regular deposits but trades on blockchain.
• It allows 24-hour real-time transfers with low transaction fees.
• It can be seen as an early form of CBDC used in the Bank of Korea's experiment.

3️⃣ Analysis and Economic Forecast

✅ Results and Challenges of Bank of Korea's CBDC Experiment

• Let's analyze the results and future challenges from the 3-month deposit token experiment.

  • First, creating 80,000 wallets shows higher interest than expected. Creating 80,000 digital wallets in just 3 months is considered good results. This shows that regular people have high interest in digital currency. Especially young people showed high acceptance of new payment methods. However, 80,000 people is only 0.15% of the total population, so more effort is needed for widespread use. Looking at how participants used the service, they were satisfied with small payments and person-to-person transfers, but it will take time to become an everyday payment method.

  • Second, the cost of 260,000 won per wallet is quite high. Dividing 21 billion won by 80,000 people means about 260,000 won in marketing costs per user. This is much higher compared to attracting customers for existing financial services. Usually, banks spend 50,000-100,000 won to attract new customers, but CBDC costs 2-5 times more. This is because digital currency is still unfamiliar, requiring more money for education and promotion. Reducing these costs will be an important challenge for future commercial use.

  • Third, technical stability and security showed relatively good levels. No system failures or security problems happened during the 3-month experiment. Blockchain-based transaction speeds were similar to regular card payments, proving practicality. However, commercial use will need to handle many more users and transactions, so additional testing of system expansion is needed. Finding the right balance between personal information protection and transaction tracking is also an important challenge.

• The Bank of Korea's CBDC experiment confirmed technical possibilities, but cost efficiency and user experience improvements are needed for commercial use.

✅ Financial Sector Stablecoin Competition Forecast

• Let's look at expected competition among financial institutions in the Korean won-based stablecoin market.

  • First, competition for 'KRW' trademarks between Kakao Bank and Kookmin Bank has started. Both financial institutions applied for 'KRW' trademarks, meaning they are preparing Korean won-based stablecoin services. Kakao Bank is expected to emphasize user-friendly interfaces based on its mobile service experience. Kookmin Bank will likely emphasize stability using its trustworthiness and capital as a major commercial bank. Other financial institutions are expected to prepare similar services, leading to intense competition.

  • Second, various benefit competitions to attract customers are expected. Considering that the Bank of Korea experiment cost 260,000 won per wallet, financial institutions will likely invest significant marketing money. Initially, they will mainly give immediate cash or discount coupons for signing up. But gradually, competition will expand to real financial benefits like interest payments on deposits, cashback on payments, and point accumulation. Services with game elements or social functions targeting young people may also appear.

  • Third, technical differentiation and ecosystem building will be key to competition. Building ecosystems connected to various financial services beyond simple payment functions will become important. For example, connecting to other financial products like investment, loans, and insurance, partnering with online shopping malls or offline stores, and providing AI-based personalized services could be differentiating factors. Cross-border services like overseas transfers or foreign currency exchange will also be important competitive areas.

• Competition in the stablecoin market is expected to promote innovation across the entire financial ecosystem, beyond simple technology competition.

✅ Financial System Changes in the Digital Currency Era

• Let's forecast how the spread of CBDC and stablecoins will affect existing financial systems.

  • First, fundamental changes in payment systems are expected. Currently, card payments or bank transfers require going through multiple financial institutions and take time. But digital currency allows 24-hour real-time payments with low fees. This will be especially beneficial for small business owners. They can receive payments immediately without card fee burdens. However, existing card companies may face damage to their profit models and need to find new business models. Also, as cash use decreases significantly, cash transport and ATM-related industries will face unavoidable changes.

  • Second, financial inclusion and accessibility will greatly improve. People who currently can't use financial services because they don't have bank accounts or have low credit scores can use basic financial services with just digital wallets. This will especially help foreign workers, elderly people, and rural residents. With just smartphones, they can send money and make payments anytime, anywhere. However, consideration for people who have difficulty using digital devices is also needed. The government should expand education and support programs to reduce digital gaps.

  • Third, new tools will emerge for monetary policy and financial supervision. Through CBDC, the government can track money flows in real-time. This will provide very useful data for economic diagnosis and monetary policy making. Also, disaster relief funds or welfare payments can be distributed more efficiently, and tracking tax evasion or illegal transactions becomes easier. However, there are concerns about invading personal financial privacy, so finding the right balance is important. Harmony between anonymity and transparency, efficiency and safety is needed.

• The spread of digital currency will accelerate digital transformation across the financial system and contribute to building a more efficient and inclusive financial ecosystem.

4️⃣ Conclusion

The Bank of Korea's CBDC experiment is an important milestone showing that our country has taken another step toward the digital currency era. The 80,000 digital wallets obtained from a 21 billion won investment show both the possibilities and challenges of digital finance, beyond simple numbers.

The most notable point from this experiment is the high customer acquisition cost. The cost of 260,000 won per wallet suggests that digital currency is still unfamiliar to the public and requires significant education and promotion for widespread adoption. However, this is also a signal of new opportunities for financial institutions.

The 'KRW' trademark competition between Kakao Bank and Kookmin Bank is just the beginning of the stablecoin market competition that has already started. More financial institutions will join the fierce competition, and consumers will be able to enjoy various benefits through this process. From discount coupons to interest refunds, innovation in financial services is expected to accelerate.

However, there are also points to be careful about during the spread of digital currency. Various challenges remain, including security and personal information protection, reducing digital gaps, and harmony with existing financial systems. Especially, an inclusive approach ensuring all citizens can equally enjoy the benefits of digital currency is important.

In the long term, digital currency will fundamentally change our financial lives. 24-hour real-time payments, low fees, and easy transfers will all make our daily lives more convenient. Small business owners can escape card fee burdens, and financially excluded groups can access financial services more easily.

Ultimately, the Bank of Korea's experiment shows that the transition to the digital currency era is no longer a distant future event. A new era is approaching that the government, financial institutions, and all of us must prepare for together.