The nominee to head the Bank of Korea, Shin Hyun-song, emphasized the importance of central bank digital currencies and bank-issued deposit tokens in forming the foundation of South Korea's digital currency system, with stablecoins playing a secondary role. In his written remarks submitted to parliament, Shin expressed support for introducing a won-based stablecoin, but emphasized that trust in the currency must be established first.
He views stablecoins as useful for facilitating tokenized asset trading and programmable payments, rather than replacing 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 checks. He also raised concerns about the efficiency of blockchain-based coins in foreign exchange, citing regulatory compliance uncertainty and added costs. Shin noted that digital assets do not fulfill the core functions of money as a unit of account, medium of exchange, and store of value.
The Bank of Korea has previously warned about the potential risks of privately issued tokens to monetary policy and financial stability, calling for strict oversight. Shin's comments 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.