According to Shin Hyun-song, the nominee to head the Bank of Korea, the country's digital monetary system should primarily consist of a central bank digital currency and bank-issued deposit tokens, with stablecoins playing a secondary, supplementary role. In his written remarks submitted to parliament, Shin emphasized the need for trust in the currency and expressed support for introducing a won-based stablecoin, but only after ensuring that it meets strict compliance standards. He views stablecoins as useful for specific applications, such as trading tokenized assets and facilitating programmable payments, rather than as a replacement for state-backed currency.
Shin's proposal is in line with the central bank's stance that stablecoin issuance should be led by regulated banks, which already adhere to anti-money laundering and customer verification requirements. He also raised concerns about the potential risks and inefficiencies associated with blockchain-based coins, particularly with regards to regulatory compliance and added costs.
Furthermore, Shin noted that digital assets currently fall short of fulfilling the core functions of money, including serving as a unit of account, medium of exchange, and store of value. The Bank of Korea has previously warned about the potential risks of privately issued tokens to monetary policy and financial stability, emphasizing the need for strict oversight and regulation.
Shin's remarks come amid ongoing debates among policymakers about 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.