Shin Hyun-song, the nominee to lead the Bank of Korea, has expressed support for a digital currency system centered around a central bank digital currency and bank-issued deposit tokens, 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 emphasized 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 currency. Shin's proposal aligns with the central bank's stance that stablecoin issuance should begin with regulated banks, citing compliance demands such as anti-money laundering and customer checks as reasons to start with established lenders. He also expressed skepticism about the potential of blockchain-based coins to improve foreign exchange efficiency, citing regulatory compliance uncertainty and added costs. Furthermore, Shin noted that digital assets fall short of fulfilling the core functions of money 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 called 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 up, with regulators pushing for bank-led models and lawmakers proposing broader frameworks that would allow non-bank issuers under new legislation.
This development follows the launch of the country's first fully regulated stablecoin, KRW1, in February, which was introduced through a partnership between crypto custody service provider BDACS and Woori Bank.