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 serving a secondary purpose. In his written remarks submitted to parliament, Shin expressed support for introducing a won-based stablecoin, but stressed that establishing trust in the currency is paramount. He views stablecoins as useful for facilitating tokenized asset trading and 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, citing compliance requirements such as anti-money laundering and customer checks. He also expressed skepticism about the potential of blockchain-based coins to enhance foreign exchange efficiency, citing regulatory uncertainty and additional costs. Furthermore, Shin 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 that privately issued tokens could pose risks to monetary policy and financial stability, and has advocated for strict oversight, including anti-money laundering and customer verification rules. Shin's comments come as policymakers debate 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.