In his first official address, the new Governor of the Bank of Korea, Shin Hyun-song, highlighted the importance of central bank digital currencies and bank-issued tokens, omitting any reference to stablecoins amidst ongoing discussions on new cryptocurrency regulations in South Korea. Shin, who commenced his four-year term, drew attention to the bank's ongoing pilot projects, including Project Hangang, which focuses on retail central bank digital currencies and deposit tokens, as well as its participation in Project Agorá, a cross-border tokenization initiative led by the Bank for International Settlements. He positioned digital currencies as a key aspect of the central bank's evolving role in a period marked by economic challenges and slower domestic growth.
Notably, Shin's speech did not mention stablecoins, a topic that has been at the forefront of policy debates in Seoul, where lawmakers are considering the Digital Asset Basic Act, which aims to establish guidelines for stablecoin issuance. Previously, Shin had suggested that stablecoins could coexist with central bank digital currencies and deposit tokens in a complementary and competitive manner.
His address outlined a model where the central bank would issue a digital currency, while commercial banks would provide deposit tokens that are fully convertible into it, emphasizing that any stablecoin issuance should originate from regulated banks. Furthermore, Shin indicated that the central bank would enhance its monitoring of cryptocurrency markets and non-traditional financial institutions, seeking greater access to data to assess financial risks. He also committed to modernizing currency markets, including the implementation of 24-hour foreign exchange trading and an offshore won settlement system.