The nominee to lead the Bank of Korea, Shin Hyun-song, has expressed his support for a central bank digital currency and bank-issued deposit tokens as the foundation of South Korea's digital monetary system, with stablecoins playing a secondary role. According to Yonhap, Shin stated that he expects central bank digital currencies and deposit tokens to coexist with stablecoins in a supplementary and competitive manner.
In his written remarks submitted to parliament, Shin voiced his support for introducing a won-based stablecoin, but stressed that trust in the currency must be established first. He views stablecoins as useful tools for trading tokenized assets and facilitating 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 commence with regulated banks, citing compliance demands such as anti-money laundering and customer checks as reasons to start with established lenders. He also expressed skepticism regarding claims that blockchain-based coins would enhance foreign exchange efficiency, citing uncertainty around regulatory compliance and added costs.
Shin noted that digital assets fall short of fulfilling the core roles of money as a unit of account, a medium of exchange, and a store of value. The Bank of Korea has warned that privately issued tokens could pose risks to monetary policy and financial stability, and has called 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.
The country's first fully regulated stablecoin, KRW1, was launched in February through a partnership between crypto custody service provider BDACS and Woori Bank.