According to Shin Hyun-song, the nominee to head the Bank of Korea, the country's digital monetary system should be centered around a central bank digital currency and bank-issued deposit tokens, with stablecoins playing a subordinate role. He stated that these two elements could coexist with stablecoins in a supplementary and competitive manner.
Shin expressed support for introducing a won-based stablecoin, but underscored the need for trust in the currency to come first. He views stablecoins as useful for trading tokenized assets and facilitating programmable payments, rather than as a replacement for state-backed currency. Shin's proposal is in line with the central bank's stance that stablecoin issuance should initially be handled by regulated banks, citing the need for compliance with anti-money laundering and customer verification requirements. He also raised concerns about the claims that blockchain-based coins can improve foreign exchange efficiency, citing regulatory compliance uncertainty and added costs.
Shin noted that digital assets fall short of fulfilling the core functions of money as a unit of account, medium of exchange, and store of value. The Bank of Korea has previously warned that privately issued tokens pose risks to monetary policy and financial stability, advocating for strict oversight. Shin's comments 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.