The Bank of Korea's nominee, Shin Hyun-song, has outlined his vision for South Korea's digital currency system, with central bank digital currencies and bank-issued deposit tokens at its core, and stablecoins playing a secondary role. According to Shin, these two can coexist in a supplementary and competitive manner.
He submitted written remarks to parliament, stating that while he supports the introduction of a won-based stablecoin, trust in the currency must be established first. Shin views stablecoins as useful for trading tokenized assets and facilitating programmable payments, but not as a replacement for state-backed currency. His 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. Shin also expressed skepticism about the potential of blockchain-based coins to improve foreign exchange efficiency, due to regulatory compliance uncertainty and added costs.
Furthermore, he 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 risks posed by privately issued tokens to monetary policy and financial stability, advocating for strict oversight.
Shin's remarks come amid ongoing debates among policymakers on how to regulate the market, with regulators pushing for bank-led models and lawmakers proposing broader frameworks that would allow non-bank issuers under new legislation.