Shin Hyun-song, the nominee to lead the Bank of Korea, stated that a central bank digital currency and bank-issued deposit tokens should be the foundation of South Korea's digital currency system, with stablecoins playing a supporting role. He noted that central bank digital currencies and deposit tokens can coexist with stablecoins in a complementary and competitive manner.
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 trading tokenized assets and enabling programmable payments, rather than replacing state-backed currency.
His proposal is in line with the central bank's position that stablecoin issuance should begin with regulated banks, citing compliance requirements such as anti-money laundering and customer checks. Shin also questioned the claim that blockchain-based coins would improve foreign exchange efficiency, citing regulatory uncertainty and added costs. He 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 warned that privately issued tokens could pose risks to monetary policy and financial stability, and has called for strict oversight.
Shin's remarks come amid ongoing debates among policymakers on how to regulate the market, with regulators pushing for bank-led models and lawmakers proposing broader frameworks that would allow non-bank issuers under new legislation.