The nominee to lead the Bank of Korea, Shin Hyun-song, has expressed support for a central bank digital currency, suggesting that it should form the foundation of South Korea's digital monetary system, with stablecoins playing a secondary role. According to Yonhap, Shin stated that central bank digital currencies and deposit tokens can coexist with stablecoins in a complementary and competitive manner.
He submitted written remarks to parliament, indicating his support for introducing a won-based stablecoin, but emphasized the need for trust in the currency to come first. Shin views stablecoins as useful for trading tokenized assets and enabling programmable payments, rather than replacing state-backed currency. He also highlighted the importance of compliance with anti-money laundering and customer verification regulations, suggesting that stablecoin issuance should begin with regulated banks. Shin questioned the potential of blockchain-based coins to improve foreign exchange efficiency, citing regulatory uncertainty and added costs.
He noted that digital assets fall short of fulfilling the core functions of money, including serving as a unit of account, medium of exchange, and store of value. The Bank of Korea has warned of the potential risks of privately issued tokens 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.