The nominee to lead the Bank of Korea, Shin Hyun-song, has stated that a central bank digital currency and bank-issued deposit tokens should be at the core of South Korea's digital money system, with stablecoins playing a supporting role. He believes that central bank digital currencies and deposit tokens can coexist with stablecoins in a competitive and supplementary manner. Shin has submitted written remarks to parliament, expressing his support for introducing a won-based stablecoin, but only after trust in the currency has been established. He views stablecoins as useful for trading tokenized assets and enabling programmable payments, but not as a replacement for state-backed currency.
His proposal is in line with the central bank's current stance that stablecoin issuance should begin with regulated banks, citing the need for compliance with anti-money laundering and customer checks. Shin has also questioned the claim that blockchain-based coins can improve foreign exchange efficiency, citing regulatory compliance uncertainty and added costs. He notes 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 warned of the potential risks of privately issued tokens to monetary policy and financial stability, advocating for strict oversight. Shin's remarks 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.