According to Shin Hyun-song, the nominee to lead the Bank of Korea, the country's digital money system should be centered around a central bank digital currency and bank-issued deposit tokens, with stablecoins playing a supporting 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 his support for introducing a won-based stablecoin, but emphasized that building trust in the currency is paramount.
He views stablecoins as useful for trading tokenized assets and facilitating programmable payments, rather than replacing state-backed currency. Shin's proposal is in line with the central bank's current 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 claims that blockchain-based coins would enhance foreign exchange efficiency, pointing to regulatory compliance uncertainty and added costs.
Furthermore, Shin noted that digital assets fail to 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 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. Recently, the country's first fully regulated stablecoin, KRW1, was launched through a partnership between crypto custody service provider BDACS and Woori Bank.