The nominee for the Bank of Korea's leadership, Shin Hyun-song, has expressed support for a digital currency framework led by the central bank, suggesting that bank-issued deposit tokens and central bank digital currencies should form the foundation of South Korea's digital monetary system, with stablecoins playing a secondary role. According to Yonhap, Shin stated that he anticipates these currencies and tokens will coexist with stablecoins in a supplementary and competitive manner. In his written remarks submitted to parliament, Shin voiced his support for introducing a won-based stablecoin, but underscored the importance of establishing trust in the currency first. He views stablecoins as useful for facilitating the trade of tokenized assets and enabling programmable payments, rather than as a replacement for state-backed currency.
His proposal aligns with the central bank's stance that stablecoin issuance should commence with regulated banks, citing compliance requirements such as anti-money laundering and customer checks as key reasons for this approach. Shin also expressed skepticism about the potential of blockchain-based coins to enhance foreign exchange efficiency, citing regulatory compliance uncertainty and added costs.
Furthermore, he 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 cautioned that privately issued tokens could pose risks to monetary policy and financial stability, advocating 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 permit non-bank issuers under new legislation. Notably, the country's first fully regulated stablecoin, KRW1, was launched in February through a partnership between crypto custody service provider BDACS and Woori Bank.