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 currency system, with stablecoins playing a secondary role. He stated that central bank digital currencies and deposit tokens can coexist with stablecoins in a supplementary and competitive manner. In his written remarks, Shin emphasized the need for trust in the currency and proposed introducing a won-based stablecoin, but only after ensuring strict compliance controls are in place.
He views stablecoins as useful for trading tokenized assets and enabling programmable payments, but not as a replacement for state-backed currency. Shin's proposal aligns 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.
He also expressed skepticism about the potential of blockchain-based coins to improve foreign exchange efficiency, citing regulatory compliance uncertainty and added costs. Furthermore, Shin 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 previously warned about the risks of privately issued tokens to monetary policy and financial stability, advocating 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.