Shin Hyun-song, the nominee to head the Bank of Korea, proposed that 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 noted that these two forms of digital currency can coexist with stablecoins in a supplementary and competitive manner. In his written remarks, Shin expressed support 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 currencies.
Shin's proposal is in line with the central bank's stance that stablecoin issuance should be initiated by regulated banks, citing the need for compliance with anti-money laundering and customer verification requirements. He also cast doubt on the claim that blockchain-based coins can improve foreign exchange efficiency, citing regulatory uncertainty and added costs. Shin stated that digital assets fail to fulfill the fundamental roles of money as a unit of account, medium of exchange, and store of value. The Bank of Korea has warned that privately issued tokens pose risks to monetary policy and financial stability, and has called for strict oversight.
Shin's remarks come as policymakers debate the extent to which the market should be opened up, with regulators advocating for bank-led models and lawmakers proposing broader frameworks that would allow non-bank issuers under new legislation.