The Bank of Korea's nominee, Shin Hyun-song, has expressed his support for a central bank digital currency, suggesting that it should be the foundation of South Korea's digital monetary system, with stablecoins playing a supporting role. He stated that central bank digital currencies and deposit tokens can coexist with stablecoins in a competitive and supplementary manner. Shin emphasized the need for trust in the currency and proposed the introduction of a won-based stablecoin, but highlighted that this should be done with strict anti-money laundering and compliance controls 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 is in line with the central bank's position that stablecoin issuance should be led by regulated banks, citing the need for compliance with anti-money laundering and customer verification rules. He also expressed skepticism about the ability of blockchain-based coins to improve foreign exchange efficiency, citing regulatory uncertainty and added costs. Furthermore, Shin noted that digital assets fall short of fulfilling the core functions of money, including serving as a unit of account, a medium of exchange, and a store of value. The Bank of Korea has previously warned about the potential risks of privately issued tokens to monetary policy and financial stability, and has called for strict oversight.
Shin's remarks come as 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. Recently, the country's first fully regulated stablecoin, KRW1, was launched through a partnership between crypto custody service provider BDACS and Woori Bank.