The nominee to lead the Bank of Korea, Shin Hyun-song, has expressed his support for a central bank digital currency, suggesting that it should form the backbone of South Korea's digital monetary system, with stablecoins playing a secondary role. According to Shin, central bank digital currencies and deposit tokens can coexist with stablecoins in a supplementary and competitive manner.
He has also voiced his support for introducing a won-based stablecoin, but stressed that trust in the currency must be established first. Shin views stablecoins as useful for facilitating the trading of tokenized assets and enabling programmable payments, rather than as a replacement for state-backed currency. His proposal is in line with the central bank's existing stance that stablecoin issuance should be initiated by regulated banks, citing the need for compliance with anti-money laundering and customer verification requirements. Shin has also raised concerns about the potential risks associated with blockchain-based coins, including regulatory uncertainty and added costs.
Furthermore, he believes 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 that privately issued tokens could pose risks to monetary policy and financial stability, and has called for strict oversight, including anti-money laundering and customer verification rules.