The nominee to lead the Bank of Korea, Shin Hyun-song, has outlined his vision for South Korea's digital currency system, with central bank digital currencies and bank-issued deposit tokens at its core, and stablecoins playing a secondary role. In his written remarks submitted to parliament, Shin stated that he expects these digital currencies to coexist with stablecoins in a competitive and supplementary manner.
He emphasized the need for trust in the currency and proposed introducing a won-based stablecoin, while highlighting the importance of compliance with anti-money laundering and customer verification regulations. Shin's proposal aligns with the central bank's existing stance that stablecoin issuance should be led by regulated banks, which already meet these standards. He also expressed skepticism about the potential of blockchain-based coins to improve foreign exchange efficiency, citing regulatory compliance and added costs as concerns.
Furthermore, Shin noted that digital assets fall short of fulfilling the core functions of money, including serving as a unit of account, medium of exchange, and store of value. The Bank of Korea has previously warned about the risks posed by privately issued tokens to monetary policy and financial stability, and has called for strict oversight. Shin's remarks come as policymakers debate the future of the market, with regulators pushing for bank-led models and lawmakers proposing broader frameworks that would allow non-bank issuers under new legislation.