The nominee to lead the Bank of Korea, Shin Hyun-song, has stated that a central bank digital currency and bank-issued deposit tokens should be the foundation of South Korea's digital monetary system, with stablecoins playing a subordinate role. According to Yonhap, Shin noted that central bank digital currencies and deposit tokens can coexist with stablecoins in a supplementary and competitive manner.
In his written remarks submitted to parliament, Shin expressed support for introducing a won-based stablecoin, but emphasized that trust in the currency must be established first. He views stablecoins as useful tools for trading tokenized assets and enabling programmable payments, rather than as a replacement for state-backed currency. Shin's proposal is in line with the central bank's existing stance that stablecoin issuance should be initiated by regulated banks, citing compliance requirements such as anti-money laundering and customer checks. He also questioned the claim that blockchain-based coins would enhance foreign exchange efficiency, citing regulatory compliance uncertainty and added costs.
Shin stated 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 warned that privately issued tokens could pose risks to monetary policy and financial stability, calling 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 allow non-bank issuers under new legislation. South Korea's first fully regulated stablecoin, KRW1, was launched in February through a partnership between crypto custody service provider BDACS and Woori Bank.