The nominee to lead the Bank of Korea, Shin Hyun-song, has outlined a vision for South Korea's digital currency system, with central bank digital currencies and deposit tokens at its core, supplemented by stablecoins in a secondary capacity. According to Yonhap, Shin stated that he expects central bank digital currencies and deposit tokens to coexist with stablecoins in a mutually supplementary and competitive manner.
In his written remarks to parliament, Shin expressed support for introducing a won-based stablecoin, but stressed that trust in the currency must be established first. He views stablecoins as useful for facilitating the trading of tokenized assets and enabling programmable payments, rather than as a replacement for state-backed currencies. Shin's proposal aligns with the central bank's existing stance that stablecoin issuance should be initiated by regulated banks, citing compliance requirements such as anti-money laundering and customer checks. He also raised concerns about the efficiency of blockchain-based coins in foreign exchange, citing uncertainties surrounding regulatory compliance and added costs.
Furthermore, 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 could pose risks to monetary policy and financial stability, advocating for strict oversight, including anti-money laundering and customer verification rules. 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.
Recently, the country's first fully regulated stablecoin, KRW1, was launched through a partnership between crypto custody service provider BDACS and Woori Bank.