According to Shin Hyun-song, the nominee to lead the Bank of Korea, a central bank digital currency and bank-issued deposit tokens should be the foundation of South Korea's digital currency system, with stablecoins playing a secondary role. He stated that he expects central bank digital currencies and deposit tokens to coexist with stablecoins in a supplementary and competitive manner. In his written remarks, Shin expressed support for introducing a won-based stablecoin but stressed that establishing trust in the currency is paramount.
He views stablecoins as useful for trading tokenized assets and enabling programmable payments, rather than replacing state-backed currency. Shin's proposal is in line with the central bank's stance that stablecoin issuance should begin with regulated banks, citing the need for compliance with anti-money laundering and customer verification requirements. He also questioned the claim that blockchain-based coins would enhance foreign exchange efficiency, citing regulatory compliance uncertainty and added costs. Shin noted that digital assets fall short of fulfilling 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, emphasizing the need for strict oversight. Shin's remarks come amid ongoing debates among policymakers on how to regulate the market, with regulators pushing for bank-led models and lawmakers proposing broader frameworks that would allow non-bank issuers under new legislation.