Shin Hyun-song, the nominee to head the Bank of Korea, emphasized that a central bank digital currency and bank-issued deposit tokens should be the backbone of South Korea's digital monetary system, with stablecoins serving a secondary purpose. He 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 to parliament, Shin expressed support for introducing a won-based stablecoin but highlighted the need for trust in the currency to come first.
He views stablecoins as useful tools for trading tokenized assets and enabling programmable payments, rather than as a replacement for state-backed currency. His 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. Shin also questioned the claim that blockchain-based coins would enhance foreign exchange efficiency, citing regulatory compliance uncertainty and added costs.
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 that privately issued tokens could pose risks to monetary policy and financial stability, calling 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.