The nominee to head the Bank of Korea, Shin Hyun-song, has expressed support for a central bank digital currency, suggesting that it and bank-issued deposit tokens should be the foundation of South Korea's digital currency system. He envisions stablecoins playing a secondary role, serving as a supplementary tool for tokenized asset trading and programmable payments rather than a replacement for fiat currency. Shin emphasized the importance of trust and regulatory compliance, proposing the introduction of a won-based stablecoin while prioritizing anti-money laundering and customer verification measures. His stance aligns with the central bank's position that stablecoin issuance should be led by regulated banks, citing the need for strict oversight to ensure compliance with existing standards.
Shin also expressed skepticism regarding the potential of blockchain-based coins to enhance foreign exchange efficiency, citing regulatory uncertainty and additional costs. Furthermore, he noted that digital assets fail to fulfill the fundamental roles of money as a unit of account, medium of exchange, and store of value.
The Bank of Korea has previously cautioned that privately issued tokens could pose risks to monetary policy and financial stability, advocating for stringent oversight. Shin's remarks come amidst ongoing debates among policymakers on how to regulate the market, with regulators pushing for bank-led models and lawmakers proposing broader frameworks that would permit non-bank issuers under new legislation.