The nominee to lead the Bank of Korea, Shin Hyun-song, has expressed his support for a digital currency system centered around a central bank digital currency and bank-issued deposit tokens, with stablecoins playing a supplementary role. In his written remarks submitted to the parliament ahead of his confirmation hearing, Shin stated that he expects central bank digital currencies and deposit tokens to coexist with stablecoins in a competitive and complementary manner. He emphasized the importance of trust in the currency and advocated for the introduction of a won-based stablecoin, while also stressing that stablecoins should not be seen as a replacement for state-backed money. Instead, he views them as useful tools for trading tokenized assets and enabling programmable payments.
Shin's proposal aligns with the central bank's stance that stablecoin issuance should be led by regulated banks, citing compliance demands such as anti-money laundering and customer checks. He also expressed skepticism about the potential of blockchain-based coins to improve 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 previously warned about the potential risks of privately issued tokens to monetary policy and financial stability, and has called for strict oversight, including anti-money laundering and customer verification rules.
Shin's remarks come at a time when policymakers are debating 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.