The nominee to lead the Bank of Korea, Shin Hyun-song, has stated that a central bank digital currency and bank-issued deposit tokens should be the foundation of South Korea's digital monetary system, with stablecoins playing a supporting role. He noted that central bank digital currencies and deposit tokens can coexist with stablecoins in a competitive and supplementary manner. Shin expressed support for introducing a won-based stablecoin, but highlighted the need for trust in the currency to come first. He views stablecoins as useful for trading 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 begin with regulated banks, citing compliance requirements such as anti-money laundering and customer checks. He also questioned the claim that blockchain-based coins can improve foreign exchange efficiency, citing regulatory uncertainty and added costs. Shin stated that digital assets do not fulfill 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 pose risks 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.