The nominee to lead the Bank of Korea, Shin Hyun-song, has expressed his support for a central bank digital currency model, stating that it and bank-issued deposit tokens should be at the forefront of South Korea's digital money system. In his view, stablecoins should have a supplementary and competitive role.
He noted that trust in the currency is paramount and that stablecoins can be useful for tokenized assets and 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 regulated and begin with established banks, citing compliance demands such as anti-money laundering and customer checks. He also raised concerns about the efficiency of blockchain-based coins in foreign exchange and the shortcomings of digital assets as a unit of account, medium of exchange, and store of value.
The Bank of Korea has previously warned about the risks of privately issued tokens to monetary policy and financial stability, advocating for strict oversight. Shin's remarks come amidst ongoing debates among policymakers on how to regulate the market, with regulators pushing for bank-led models and lawmakers proposing broader frameworks for non-bank issuers.