According to Shin Hyun-song, the nominee to lead the Bank of Korea, the country's digital monetary system should be centered around a central bank digital currency and bank-issued deposit tokens, with stablecoins playing a supporting role. He stated that these two should coexist in a way that is both supplementary and competitive.
In his written remarks to parliament, Shin expressed support for introducing a stablecoin pegged to the won, but highlighted the need for trust in the currency to be established first. He views stablecoins as useful for facilitating the trading of tokenized assets and enabling programmable payments, rather than replacing state-backed currency. His proposal is in line with the central bank's stance that stablecoin issuance should be initiated by regulated banks, citing the need for compliance with anti-money laundering and customer verification requirements. Shin also raised concerns about the potential of blockchain-based coins to improve foreign exchange efficiency, citing regulatory uncertainty and additional costs.
Furthermore, he noted that digital assets fall short of fulfilling the core functions of money as a unit of account, medium of exchange, and store of value. The Bank of Korea has previously warned about the risks posed by privately issued tokens to monetary policy and financial stability, advocating for strict oversight. Shin's comments come at a time when policymakers are debating 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.