The nominee to lead the Bank of Korea, Shin Hyun-song, 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, Shin stated that he expects central bank digital currencies and deposit tokens to coexist with stablecoins in a supplementary and competitive manner. In his written remarks to parliament, Shin voiced his support 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 is in line with the central bank's stance that stablecoin issuance should be initiated by regulated banks, citing compliance requirements such as anti-money laundering and customer checks. He also raised concerns about the efficiency of blockchain-based coins in foreign exchange, citing regulatory 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 previously warned about the potential risks of privately issued tokens to monetary policy and financial stability, advocating for strict oversight. Shin's comments 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.
Recently, the country's first fully regulated stablecoin, KRW1, was launched through a partnership between BDACS and Woori Bank.