According to Shin Hyun-song, the nominee to lead the Bank of Korea, the country's digital monetary system should be centered around a central bank digital currency and bank-issued deposit tokens, with stablecoins playing a secondary role. He envisions these digital currencies coexisting in a competitive and supplementary manner. In his written remarks to parliament, Shin voiced his 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 facilitating the trading of tokenized assets and enabling programmable payments, rather than as a replacement for state-backed currency.
Shin's proposal is in line with the central bank's stance that stablecoin issuance should be initiated by regulated banks, which already meet compliance demands such as anti-money laundering and customer checks. He also expressed skepticism regarding the potential of blockchain-based coins to enhance foreign exchange efficiency, citing regulatory uncertainty and added costs. Furthermore, Shin 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 of the potential risks posed by privately issued tokens to monetary policy and financial stability, advocating for strict oversight and regulations.
Shin's comments come as policymakers engage in a debate over 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. Recently, the country's first fully regulated stablecoin, KRW1, was launched through a partnership between crypto custody service provider BDACS and Woori Bank.