The nominee to lead the Bank of Korea, Shin Hyun-song, has expressed his support for a digital currency system centered around a central bank digital currency and bank-issued deposit tokens, with stablecoins playing a secondary role. In his written remarks, Shin stated that he expects central bank digital currencies and deposit tokens to coexist with stablecoins in a supplementary and competitive manner.
He also emphasized the need for trust in the currency to come first, particularly for a won-based stablecoin. Shin views stablecoins as useful for trading tokenized assets and enabling programmable payments, but not as a replacement for state-backed money.
His proposal is in line with the central bank's position that stablecoin issuance should begin with regulated banks, citing compliance demands such as anti-money laundering and customer checks. Shin also raised concerns about the efficiency of blockchain-based coins in foreign exchange, citing regulatory compliance and added costs. Furthermore, he noted that digital assets fall short of fulfilling the core roles of money as a unit of account, medium of exchange, and store of value.
The Bank of Korea has warned about the potential risks of privately issued tokens to monetary policy and financial stability, and has called for strict oversight. Shin's remarks come as policymakers debate the market's future, with regulators pushing for bank-led models and lawmakers proposing broader frameworks that would allow non-bank issuers under new legislation.