According to Shin Hyun-song, the nominee for the Bank of Korea's leadership, the country's digital monetary system should be centered around a central bank digital currency and bank-issued deposit tokens, with stablecoins playing a secondary role. In his written remarks submitted to parliament, Shin stated that he expects central bank digital currencies and deposit tokens to coexist with stablecoins in a supplementary and competitive manner.
He emphasized the need for trust in the currency to be established first, particularly if a won-based stablecoin is introduced. Shin views stablecoins as useful for facilitating the trade of tokenized assets and enabling programmable payments, rather than as a replacement for state-backed currency. His proposal is in line with the central bank's current stance that stablecoin issuance should be initiated by regulated banks, citing compliance requirements such as anti-money laundering and customer checks. Shin also expressed skepticism regarding the potential of blockchain-based coins to enhance foreign exchange efficiency, citing regulatory compliance uncertainty and added costs.
Furthermore, he noted that digital assets fall short of fulfilling the core functions of money, including serving as a unit of account, a medium of exchange, and a store of value. The Bank of Korea has previously warned that privately issued tokens could pose risks to monetary policy and financial stability, advocating for strict oversight. Shin's remarks come at a time when policymakers are debating 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.