The nominee to lead the Bank of Korea, Shin Hyun-song, has expressed his support for a central bank-led digital currency model, suggesting that it should form the foundation of South Korea's digital monetary system, with stablecoins playing a secondary, supplementary role. In his written remarks submitted to parliament, Shin noted that while he supports the introduction of a won-based stablecoin, trust in the currency must be established first.
He views stablecoins as useful for facilitating the trading of tokenized assets and enabling programmable payments, but not as a replacement for state-backed currency. Shin's proposal is in line with the central bank's stance that stablecoin issuance should be initiated by regulated banks, citing the need for compliance with anti-money laundering and customer verification regulations.
He also raised concerns about the efficiency of blockchain-based coins in foreign exchange, highlighting regulatory compliance uncertainty and added costs. Furthermore, Shin stated that digital assets fail to fulfill the fundamental roles of money as a unit of account, medium of exchange, and store of value. The Bank of Korea has previously warned about the potential risks of privately issued tokens to monetary policy and financial stability, advocating for strict oversight.
Shin's comments come as policymakers discuss the extent to which the market should be opened up, with regulators pushing for bank-led models and lawmakers proposing broader frameworks that would allow non-bank issuers under new legislation.