Shin Hyun-song, the Bank of Korea's nominee, proposed a digital money system centered around central bank digital currencies and bank-issued deposit tokens, with stablecoins playing a secondary role. He suggested that central bank digital currencies and deposit tokens can coexist with stablecoins in a supplementary and competitive manner. Shin supports the introduction of a won-based stablecoin, but prioritizes building trust in the currency.
He views stablecoins as useful for trading tokenized assets and enabling programmable payments, rather than replacing state-backed money. Shin's proposal aligns with the central bank's stance that stablecoin issuance should begin with regulated banks, citing compliance demands such as anti-money laundering and customer checks. He also questioned the potential of blockchain-based coins to improve foreign exchange efficiency, citing regulatory uncertainty and added costs.
Shin noted that digital assets fall short of fulfilling money's core roles as a unit of account, medium of exchange, and store of value. The Bank of Korea has warned of the risks posed by privately issued tokens to monetary policy and financial stability, calling for strict oversight. Shin's remarks come amidst debates on market regulation, with policymakers considering the extent to which the market should be opened up.