The nominee to lead the Bank of Korea, Shin Hyun-song, has expressed his support for a central bank digital currency, suggesting that it and bank-issued deposit tokens should be at the forefront of South Korea's digital currency system, with stablecoins playing a secondary role. According to Shin, central bank digital currencies and deposit tokens can coexist with stablecoins in a supplementary and competitive manner. He has also stated that he supports the introduction of a won-based stablecoin, but emphasizes that trust in the currency must be established first. Shin views stablecoins as useful tools for trading tokenized assets and enabling programmable payments, rather than as a replacement for state-backed currency.
His proposal is in line with the central bank's existing stance that stablecoin issuance should be initiated by regulated banks, citing compliance demands such as anti-money laundering and customer checks as reasons for this approach. Shin has also expressed skepticism regarding the claim that blockchain-based coins can improve foreign exchange efficiency, citing uncertainty around regulatory compliance and added costs. Furthermore, he believes 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, and has called 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.