According to the Bank of Korea's nominee, Shin Hyun-song, a central bank digital currency and bank-issued deposit tokens should be the foundation of South Korea's digital monetary system, with stablecoins playing a subordinate role. He stated that he anticipates central bank digital currencies and deposit tokens to coexist with stablecoins in a supplementary 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 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 current 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. Furthermore, 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, advocating for strict 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, with regulators pushing for bank-led models and lawmakers proposing broader frameworks that would allow non-bank issuers under new legislation.