The nominee to lead the Bank of Korea, Shin Hyun-song, has expressed support for a central bank digital currency and deposit tokens, suggesting that they should be the primary components of South Korea's digital financial system. He believes that stablecoins can coexist with these currencies in a supplementary and competitive manner. According to Shin, trust in the currency is paramount, and he proposes introducing a won-based stablecoin. However, he views stablecoins as tools for trading tokenized assets and facilitating programmable payments, rather than as a replacement for traditional currency.
Shin's proposal is in line with the central bank's stance that stablecoin issuance should be initiated by regulated banks, due to the need for compliance with anti-money laundering and customer verification requirements. He has also raised concerns about the efficiency of blockchain-based coins in foreign exchange and the potential risks associated with privately issued tokens. The Bank of Korea has consistently warned about the potential risks of privately issued tokens to monetary policy and financial stability, advocating for strict regulations and oversight.