The nominee to lead the Bank of Korea, Shin Hyun-song, has proposed that a central bank digital currency and bank-issued deposit tokens should form the foundation of South Korea's digital monetary system, with stablecoins playing a secondary 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 expressed support for introducing a won-based stablecoin, but stressed that establishing trust in the currency is paramount. He views stablecoins as useful tools for trading tokenized assets and facilitating programmable payments, rather than as a replacement for state-backed currency. Shin's proposal is in line with the central bank's existing stance that stablecoin issuance should commence with regulated banks, citing compliance demands such as anti-money laundering and customer checks as reasons to start with established lenders. He also questioned the claim that blockchain-based coins would enhance foreign exchange efficiency, citing regulatory compliance uncertainty and added costs.
Regarding cryptocurrencies in general, 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 up, with regulators pushing for bank-led models and lawmakers proposing broader frameworks that would allow non-bank issuers under new legislation.