The nominee for the Bank of Korea, Shin Hyun-song, has expressed his support for a digital currency model led by the central bank, with bank-issued deposit tokens at its core, while assigning a secondary role to stablecoins. According to Yonhap, he stated that central bank digital currencies and deposit tokens can coexist with stablecoins in a supplementary and competitive manner. In his written remarks to parliament, Shin emphasized the need for trust in the currency to come first and proposed introducing a won-based stablecoin.
He views stablecoins as useful for trading tokenized assets and enabling programmable payments, but not as a replacement for state-backed money. Shin's proposal aligns with the central bank's stance that stablecoin issuance should begin with regulated banks due to 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 compliance uncertainty and added costs. Furthermore, Shin noted that digital assets fall short of fulfilling the core roles of money as a unit of account, medium of exchange, and store of value.
The Bank of Korea has warned about the risks that privately issued tokens pose to monetary policy and financial stability, advocating for strict oversight. Shin's remarks come as policymakers debate the extent to which the market should be opened, with regulators pushing for bank-led models and lawmakers proposing broader frameworks that would allow non-bank issuers under new legislation.
Recently, the country's first fully regulated stablecoin, KRW1, was launched through a partnership between BDACS and Woori Bank.