According to Shin Hyun-song, the nominee to lead 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 replacing state-backed currency. Shin's proposal is in line with the central bank's existing stance that stablecoin issuance should commence with regulated banks, citing the need for compliance with anti-money laundering and customer verification requirements. He also raised questions about the potential of blockchain-based coins to enhance foreign exchange efficiency, citing regulatory compliance uncertainty and additional costs.
Furthermore, Shin noted 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 cautioned that privately issued tokens could pose risks to monetary policy and financial stability, advocating 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, with regulators pushing for bank-led models and lawmakers proposing broader frameworks that would allow non-bank issuers under new legislation.