According to Shin Hyun-song, the nominee to head the Bank of Korea, the country's digital monetary system should primarily consist of a central bank digital currency and bank-issued deposit tokens, with stablecoins playing a secondary role. In his written remarks submitted to parliament, Shin expressed support for introducing a won-based stablecoin, but stressed that trust in the currency must be established first.
He views stablecoins as useful for facilitating the trade of tokenized assets and enabling programmable payments, rather than as a replacement for state-backed currency. Shin's proposal is in line with the central bank's existing stance that stablecoin issuance should be initiated by regulated banks, citing the need for compliance with anti-money laundering and customer verification requirements.
He also expressed skepticism regarding the potential of blockchain-based coins to enhance 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 warned that privately issued tokens could pose risks to monetary policy and financial stability, and has called for strict oversight. Shin's comments come amid ongoing debates among policymakers regarding the extent to which the market should be opened up. While regulators have pushed for bank-led models, lawmakers have proposed broader frameworks that would allow non-bank issuers under new legislation.
Notably, the country's first fully regulated stablecoin, KRW1, was launched in February through a partnership between crypto custody service provider BDACS and Woori Bank.