According to Shin Hyun-song, the nominee to head the Bank of Korea, the country's digital monetary system should be centered around a central bank digital currency and bank-issued deposit tokens, with stablecoins taking on a secondary role. He expressed his expectation that these two elements can coexist and compete with stablecoins in a supplementary manner. Shin submitted written remarks to parliament prior to his confirmation hearing, stating his support for introducing a stablecoin pegged to the won, but stressed that trust in the currency must be established first. He views stablecoins as useful for facilitating the trading of tokenized assets and enabling programmable payments, rather than as a replacement for state-backed currencies.
Shin's proposal is in line with the central bank's stance that stablecoin issuance should be initiated by regulated banks, citing compliance requirements such as anti-money laundering and customer verification. He also raised concerns about the efficiency of blockchain-based coins in foreign exchange, citing regulatory compliance uncertainty and added costs. Furthermore, Shin noted that digital assets lack the core functions of money, including serving as a unit of account, medium of exchange, and store of value. The Bank of Korea has warned about the potential risks of privately issued tokens to monetary policy and financial stability, advocating for strict oversight.
Shin's comments come amidst ongoing debates among policymakers on 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.