The nominee to lead the Bank of Korea, Shin Hyun-song, proposed that a central bank digital currency and bank-issued deposit tokens should form the foundation of South Korea's digital money system, with stablecoins serving as a supplementary component. He noted that central bank digital currencies and deposit tokens can coexist with stablecoins in a competitive and supplementary manner. In his written remarks, Shin expressed support for introducing a won-based stablecoin, but highlighted the importance of establishing trust in the currency first. He views stablecoins as useful for trading tokenized assets and enabling programmable payments, rather than replacing state-backed money.
Shin's proposal is in line with the central bank's existing stance that stablecoin issuance should begin with regulated banks, citing compliance requirements such as anti-money laundering and customer checks. He also raised concerns about the claims that blockchain-based coins can improve foreign exchange efficiency, citing regulatory compliance uncertainty and added costs. Furthermore, Shin stated 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, including anti-money laundering and customer verification rules. Shin's comments come as policymakers debate the extent to which the market should be opened up, with regulators pushing for bank-led models and lawmakers proposing broader frameworks that would allow non-bank issuers under new legislation.