According to Shin Hyun-song, the nominee for the Bank of Korea's leadership, the country's digital monetary system should primarily consist of a central bank digital currency and bank-issued deposit tokens, with stablecoins playing a subordinate role. He expressed that these two can coexist in a supplementary and competitive manner.
Shin submitted written remarks to parliament prior to his confirmation hearing, stating his support for introducing a won-based stablecoin, but only after establishing trust in the currency. He views stablecoins as useful for trading tokenized assets and enabling programmable payments, rather than replacing state-backed currency. His proposal is in line with the central bank's stance that stablecoin issuance should commence with regulated banks, citing the need for compliance with anti-money laundering and customer checks.
Shin also questioned the potential of blockchain-based coins to improve foreign exchange efficiency due to regulatory compliance uncertainty and added costs. He noted that digital assets fall short of fulfilling money's core functions as a unit of account, medium of exchange, and store of value. The Bank of Korea has warned of the risks posed by privately issued tokens to monetary policy and financial stability, advocating for strict oversight.
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 under new legislation.