The nominee to lead the Bank of Korea, Shin Hyun-song, has expressed his support for a central bank digital currency, highlighting the need for robust anti-money laundering and compliance controls. He believes that central bank digital currencies and bank-issued deposit tokens should be the foundation of South Korea's digital money system, with stablecoins playing a secondary role. According to Shin, stablecoins can coexist with central bank digital currencies in a supplementary and competitive manner. He also stressed the importance of introducing a won-based stablecoin, but emphasized that trust in the currency must be established first.
Shin's proposal is in line with the central bank's existing position that stablecoin issuance should begin with regulated banks, due to the need for compliance with anti-money laundering and customer verification rules. He also expressed skepticism about the potential of blockchain-based coins to improve foreign exchange efficiency, citing regulatory uncertainty and added costs.
Furthermore, Shin noted 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 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 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.