The nominee to lead the Bank of Korea, Shin Hyun-song, has expressed his support for a central bank digital currency and bank-issued deposit tokens as the foundation of South Korea's digital monetary system, with stablecoins playing a secondary role. He stated that he expects central bank digital currencies and deposit tokens to coexist with stablecoins in a supplementary and competitive manner. Shin submitted written remarks to parliament prior to his confirmation hearing, in which he voiced his support for introducing a won-based stablecoin, but stressed that trust in the currency must be established first. He views stablecoins as useful tools for trading tokenized assets and facilitating 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 commence with regulated banks, citing compliance requirements such as anti-money laundering and customer checks. Shin also questioned the claim that blockchain-based coins would enhance foreign exchange efficiency, citing uncertainty surrounding regulatory compliance and added costs. Regarding cryptocurrencies in general, Shin noted that digital assets fail to 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 could pose risks to monetary policy and financial stability, and has called for stringent 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.