The nominee to lead the Bank of Korea, Shin Hyun-song, has expressed his support for a central bank digital currency, suggesting that it, along with bank-issued deposit tokens, should be at the forefront of South Korea's digital money system. He believes that stablecoins should play a supplementary role, facilitating the trading of tokenized assets and enabling programmable payments, rather than replacing state-backed currencies. In his written remarks, Shin highlighted the need for trust in the currency to be established first and emphasized the importance of compliance with anti-money laundering and customer verification regulations. He also expressed skepticism regarding the potential of blockchain-based coins to enhance foreign exchange efficiency, citing regulatory uncertainty and additional costs.
Furthermore, Shin noted that digital assets fail to fulfill the fundamental roles of money as a unit of account, medium of exchange, and store of value. His stance aligns with the central bank's position that stablecoin issuance should be initiated by regulated banks, which already adhere to the necessary standards.
As policymakers continue to debate the extent to which the market should be opened, Shin's remarks come at a time when regulators are pushing for bank-led models, while lawmakers are proposing more comprehensive frameworks that would allow non-bank issuers under new legislation.