According to Shin Hyun-song, the nominee to head the Bank of Korea, the country's digital monetary system should primarily consist of central bank digital currencies and bank-issued deposit tokens, with stablecoins serving a secondary function. He stated that central bank digital currencies and deposit tokens can coexist with stablecoins in a supplementary and competitive manner.
Shin expressed support for introducing a won-based stablecoin but emphasized 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 replacing state-backed currency. Shin's proposal is in line with the central bank's current stance that stablecoin issuance should commence with regulated banks, citing compliance requirements such as anti-money laundering and customer checks. He also questioned the claim that blockchain-based coins can improve foreign exchange efficiency due to regulatory compliance uncertainty and added costs.
Shin noted that digital assets fail to fulfill the core functions of money as a unit of account, medium of exchange, and store of value. The Bank of Korea has 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 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.