The nominee to lead the Bank of Korea, Shin Hyun-song, has expressed his support for a central bank digital currency and bank-issued deposit tokens as the foundation of South Korea's digital monetary system, with stablecoins playing a secondary role. 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 submitted to parliament, Shin advocated for introducing a won-based stablecoin, but stressed that trust in the currency must be established first. He views stablecoins as useful for trading tokenized assets and facilitating programmable payments, rather than replacing state-backed money.
His 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. Shin also questioned the claim that blockchain-based coins can improve foreign exchange efficiency, citing regulatory compliance uncertainty and added costs. He noted that digital assets fall short of fulfilling money's core functions 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, calling 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.