The nominee to lead the Bank of Korea, Shin Hyun-song, has expressed his support for a digital currency model that places central bank-issued digital currencies and bank-issued deposit tokens at its core, with stablecoins playing a supporting role. According to Yonhap, Shin stated that he expects central bank digital currencies and deposit tokens to coexist with stablecoins in a competitive and supplementary manner. In his written remarks submitted to parliament, Shin emphasized the need for trust in the currency and proposed introducing a won-based stablecoin.
However, he stressed that stablecoins should be used primarily for trading tokenized assets and enabling programmable payments, rather than replacing state-backed money. Shin's proposal is in line with the central bank's existing stance that stablecoin issuance should begin with regulated banks, citing the need for compliance with anti-money laundering and customer verification rules. He also expressed skepticism about the potential of blockchain-based coins to improve foreign exchange efficiency, citing regulatory uncertainty and added costs.
Furthermore, Shin noted that digital assets fall short of fulfilling the core functions of money, including serving as a unit of account, a medium of exchange, and a store of value. The Bank of Korea has previously warned about the risks posed by privately issued tokens to monetary policy and financial stability, advocating for strict oversight and regulation. Shin's remarks come amid ongoing debates among policymakers about 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.