Shin Hyun-song, the nominee for the Bank of Korea's leadership, proposes a digital money system centered around central bank digital currencies and bank-issued deposit tokens, with stablecoins serving a secondary purpose. He stated that these currencies can coexist and complement each other, but emphasized the need for trust and strict regulations.
Shin expressed support for introducing a won-based stablecoin, but prioritized establishing trust in the currency first. He views stablecoins as useful for specific use cases like tokenized assets and programmable payments, rather than as a replacement for state-backed currency. Shin's stance aligns with the central bank's position that stablecoin issuance should be initiated by regulated banks, citing the need for compliance with anti-money laundering and customer verification standards.
He also questioned the potential of blockchain-based coins to improve foreign exchange efficiency due to regulatory uncertainty and added costs. Regarding cryptocurrencies, Shin noted that they fail to fulfill the core functions of money as a unit of account, medium of exchange, and store of value.
His remarks come amid ongoing debates among policymakers on the regulation of digital currencies, with the Bank of Korea warning about the potential risks of privately issued tokens to monetary policy and financial stability.