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 backbone of South Korea's digital monetary system, with stablecoins playing a supplementary role. In his written remarks, Shin stated that he expects central bank digital currencies and deposit tokens to coexist with stablecoins in a competitive and supplementary manner. He also emphasized the importance of introducing a won-based stablecoin, but only after establishing trust in the currency. According to Shin, stablecoins can be useful for trading tokenized assets and enabling programmable payments, but they should not replace state-backed money.
His proposal is in line with the central bank's existing stance that stablecoin issuance should begin with regulated banks, citing compliance demands such as anti-money laundering and customer checks. Shin also expressed skepticism about the claim that blockchain-based coins can improve foreign exchange efficiency, due to regulatory compliance uncertainty and added costs. Furthermore, he 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 previously warned about the potential risks of privately issued tokens 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, with regulators pushing for bank-led models and lawmakers proposing broader frameworks that would allow non-bank issuers under new legislation.