The nominee to lead the Bank of Korea, Shin Hyun-song, has expressed his support for a digital currency system centered around a central bank digital currency and bank-issued deposit tokens, with stablecoins playing a secondary role. According to Yonhap, Shin stated that he expects central bank digital currencies and deposit tokens to coexist with stablecoins in a supplementary and competitive manner. In his written remarks submitted to parliament, Shin voiced his support for introducing a won-based stablecoin, but stressed that trust in the currency must be established first. He views stablecoins as useful tools for trading tokenized assets and enabling programmable payments, rather than as a replacement for state-backed currency.
Shin's proposal is in line with the central bank's existing stance that stablecoin issuance should commence with regulated banks, citing compliance demands such as anti-money laundering and customer checks. He also expressed skepticism regarding claims that blockchain-based coins would enhance foreign exchange efficiency, citing regulatory compliance uncertainty and added costs. Shin noted that digital assets fall short of fulfilling the core roles of money as a unit of account, medium of exchange, and store of value.
The Bank of Korea has warned that privately issued tokens could pose risks to monetary policy and financial stability, advocating for strict oversight, including anti-money laundering and customer verification rules. Shin's remarks come as policymakers debate 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.
This development follows the launch of the country's first fully regulated stablecoin, KRW1, in February, which was introduced through a partnership between crypto custody service provider BDACS and Woori Bank.