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[Photo News] LG's US headquarters doubles as science and tech hub
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Korea Herald
2 hours ago
- Korea Herald
Stablecoin hype dims BOK's CBDC ambition
Central bank's 'Han River' project loses traction due to high cost, low feasibility South Korea is poised to take a major step in digital finance with the push for a stablecoin tied to the Korean won. But as enthusiasm for private-led innovation grows, the Bank of Korea's central bank digital currency project appears to have lost steam. The shift underscores the country's lack of a coherent roadmap for integrating digital assets into its financial system, even as the transition to digital finance approaches a pivotal moment. BOK backs off The BOK recently notified local banks that the second phase of its central bank digital currency testing program, titled 'Project Han River,' has been put on hold. In April, the central bank launched the first phase of a pilot program to test the feasibility of a digital currency. Over a three-month test period, participants used tokenized deposits to purchase goods and services. The second leg of the pilot project was to take place in the fourth quarter, testing additional features such as person-to-person transfers and a simplified verification process. But the BOK has suspended the plan. "We plan to resume testing after thoroughly reviewing institutional changes, such as the clarification of stablecoin-related legislation. Once the uncertainties are somewhat resolved, we will discuss effective testing measures with participating institutions," a BOK official said. The suspension stems from the participating banks' uneasiness about the project, burdened by the costs of setting up the infrastructure for testing. The banks reportedly spent a combined 30 billion won ($22 million), a significant amount considering the absence of a clear timeline for full-scale implementation. Are stablecoins, CBDCs at odds? While banks remain doubtful about the implementation of a CBDC, they are eager to take the lead in the won-backed stablecoin market. In recent weeks, banks have been competitively filing trademark applications, combining KRW, the currency code for the Korean won, with abbreviations of their names. They are also launching task forces and seeking to launch joint ventures with tech partners. "Stablecoins are not a far-fetched idea. They have already become a part of the economy," an official from a local lender said. "Stablecoins allow for more concrete business discussions, while the institutionalization of CBDCs remains uncertain." Both stablecoins and CBDCs function as forms of payment, with stable values pegged to a fiat currency. However, they are also fundamentally different: CBDCs are state-issued payment instruments, while stablecoins are operated by the private sector. 'CBDCs are advantageous in terms of financial stability and settlement finality, while stablecoins excel in technological innovation and global scalability,' Lee Jung-su, associate professor of international financial transactions, said at a policy meeting held in May. 'The closed nature of CBDCs poses limitations in terms of international interoperability and geopolitical risks. In contrast, stablecoins offer greater flexibility with cost efficiency and cross-chain compatibility.' Though the two digital currencies are not mutually exclusive, the growing momentum for stablecoins could delay the rollout of a CBDC. If a stablecoin establishes itself as a major component of the digital asset market, the CBDC could lose ground. On the verge With a CBDC set aside for the moment, the question now lies in who will be allowed to issue won-backed stablecoins. The ruling Democratic Party of Korea has proposed allowing nonbanking entities to issue them. The BOK remains cautious on the move, however, as the unchecked issuance of won-based stablecoins by nonbanking entities could undermine the effectiveness of the bank's policy tools. Experts highlight that Korea is at a crucial turning point in shaping its digital finance landscape. 'When it comes to changes in the financial sector, it is always a question of finding a balance between stability and innovation. For the time being, Korea is on the brink of transformation,' said Lee Hyo-seob, a senior research fellow at Korea Capital Market Institute. 'Now is the time to prioritize innovation and from that perspective, nonbanking institutions can play a bigger role.'
Korea Herald
9 hours ago
- Korea Herald
Audi debuts A5, Q5 with hybrid tech and AI
German automaker zeroes in on reviving local market presence with new models Audi Korea on Tuesday launched the new Audi A5 and Q5, looking to accelerate its rebounding momentum to reclaim its top tier standing among the auto importers in the local market. 'Korean customers are at the forefront of global automotive trends,' said Steve Cloete, executive director of Audi Korea, during the new models' launch ceremony at the Conrad Seoul. 'You expect more than just performance. You seek philosophy, consistency and an enriching experience. At Audi, we are dedicated to delivering exactly that. … The two models we are introducing today — the new Audi A5 and Q5 — are crafted to meet these evolving expectations and embody the direction Audi is heading here in Korea.' The launch of the upgraded sedan A5 and enhanced sport utility vehicle Q5 came as the German automaker has been witnessing a rise in sales figures. According to the Korea Automobile Importers and Distributors Association's data, Audi Korea sold a total of 3,868 cars between January and May this year, up about 43.2 percent from the same period last year. In January this year, Audi unveiled its ambitious plan to roll out a record-high 16 new models in the Korean market, as the German automaker, which reigned as a top three auto importer in the country just two years ago, aims to regain its presence here. The German automaker emphasized that the new Audi A5 was built on the brand's new Premium Platform Combustion designed to develop cars with internal combustion engines and hybrid systems, adding that it is Audi's first diesel-powered sedan applied with its "high efficiency mild hybrid plus technology." The new Audi A5 underwent a sizable makeover for a more spacious interior in comparison to the previous generation and other sedans in the same segment, as its length, width and height were increased by 65 millimeters, 15 mm and 25 mm, respectively, to measure at 4,835 mm, 1,860 mm and 1,455 mm. All trims of the new Audi sedan feature luxury exterior functions such as a switchable panoramic roof that boasts Audi's first technology capable of controlling the transparency of the glass and side mirror projection lights as basic options. Along with the new A5, Audi underscored that the new Q5 is the brand's first SUV developed on PPC and applied with its high efficiency mild hybrid technology. Thanks to PPC, the new Q5 is 35 mm longer, 5 mm wider and 10 mm lower, measuring at 4,715 mm in length, 1,900 mm in width and 1,655 mm in height to maximize its sportiness. Ahn Berm-yong, Audi Korea's product manager, demonstrated how the artificial intelligence-based Audi assistant system loaded onto the new Q5 can aid not only the driver, but also passengers, as he sat in the passenger seat in front and gave voice orders to the vehicle to roll down the window halfway. The Q5 recognized the voice coming from the passenger seat and rolled down the window only on the side the Audi Korea official was sitting in. The prices of the new Audi A5 and Q5 begin at 57.89 million won ($42,800) and 69.68 million won, respectively. 'The new A5 and Q5 are not just vehicles,' said Cloete. 'They are proof that Audi's future is not on the horizon; it's already here. We're not merely building cars. We're crafting experiences, creating value and redefining what it means to be premium together with our valued customers."
Korea Herald
10 hours ago
- Korea Herald
Japan shipyard merger challenges Korea's role in US naval projects
The recently announced merger of Japan's two largest shipbuilders, Imabari Shipbuilding and Japan Marine United Corporation, is expected to have a limited impact on their Korean rivals but signals growing competition for contracts with the US Navy. Experts say the widening gap stems from Japan's long-standing decline in shipbuilding, which cannot be fixed by size alone. Still, Japan's renewed push is raising concerns that Korea's bargaining power may weaken, given Tokyo's established ties in servicing US Navy vessels. Gap far from closed Imabari, Japan's largest shipbuilder, announced on Thursday that it will increase its stake in JMU from 30 percent to 60 percent, turning the country's second-largest shipbuilder into a subsidiary. 'Imabari Shipbuilding and JMU will leverage each other's strengths to compete with China and Korea, and will also make efforts to develop the Japanese shipbuilding industry by making quicker and more comprehensive judgments in terms of management,' the company said in a press release. If completed, the merger would create a company responsible for roughly half of Japan's shipbuilding output, which totaled 4.8 million compensated gross tons in 2024, bringing it close to Hanwha Ocean's output of 2.8 million CGT. However, experts say Japan's shipbuilding struggles stem not from the industry's size but from a long-term lack of investment dating back to its 1988 restructuring. 'Japan has strong basic technology, but shipbuilders have lagged in facility investment and faced workforce shortages,' said Yang Jong-seo, a researcher at the Overseas Economic Research Institute under the Export-Import Bank of Korea. 'The country lost many skilled technology personnel in the late 1980s and closed numerous naval engineering departments in universities, leaving little momentum to restore its industrial competitiveness.' Industry sources also cite Japanese shipbuilders' limited recent experience with high-value vessels, such as liquefied natural gas carriers — an area where Korean shipbuilders have established expertise. According to SK Securities, Imabari last delivered LNG carriers in 2018, and JMU in 2019, while Korean shipbuilders secured 68 orders in 2024 alone. This gap, driven partly by a shortage of skilled personnel, would make clients hesitant to place orders with Japanese firms lacking proven expertise in complex ship types, sources say. A challenge to Korea's efforts toward US Navy collaboration Japan's renewed push in shipbuilding, however, is raising concerns that Korea's position may weaken in bidding for US Navy projects, given Japan's long-standing involvement in US Navy maintenance and repair work. This comes as the US seeks greater collaboration with South Korea and Japan — its top shipbuilding partners outside China — to strengthen its naval capabilities in response to growing maritime challenges from China. 'The rapid progress of the merger between Japan's two leading shipbuilders shows that Japan is putting everything on the line to collaborate with the US on maintenance, repair and overhaul,' said Choi Ki-il, professor of military studies at Sangji University. 'It seems Japan is hoping for a revival of its shipbuilding industry by anticipating demand for new US warships and MRO.' Korean shipbuilders have been actively seeking to participate in the US' efforts to strengthen its maritime presence. Korea's largest shipmaker, HD Hyundai, is expanding its network to US-based shipyards and academic institutions, while Hanwha is acquiring US shipyards experienced in US Navy vessel construction. However, Korea needs to build trust with the US through simpler maintenance work, a factor crucial in projects involving US national security, said the Federation of Korean Industries, Korea's main business lobby. Last year, Hanwha secured Korea's first US Navy maintenance contracts for the Wally Schirra, a logistics vessel, and the Yukon, a replenishment oiler. In contrast, Japanese companies and personnel have been involved in MRO projects for the US Navy for over 70 years, primarily supporting the US Seventh Fleet. Experts say Japan will push ahead with shipbuilding restructuring to leverage its expertise as a strategic asset, especially in tariff negotiations with the US. Additionally, JMU's specialization in warships is expected to strengthen Japan's position, raising concerns about Korea's role in the US Navy's expansion efforts. 'I expect strong competition to emerge between Korea and Japan in the future military ship MRO market,' said Choi. 'It will be difficult for individual companies to deal with it alone. The government and shipbuilders must work together to develop a multifaceted strategy.'
