According to Shin Hyun-song, the nominee to head the Bank of Korea, the nation's digital monetary system should be centered around a central bank digital currency and bank-issued deposit tokens, with stablecoins playing a secondary role. He expressed his expectation that central bank digital currencies and deposit tokens can coexist with stablecoins in a supplementary and competitive manner. Shin submitted written remarks to parliament prior to his confirmation hearing, stating his support for introducing a won-based stablecoin, but underscored the importance of establishing trust in the currency first. He views stablecoins as useful for trading tokenized assets and facilitating programmable payments, rather than replacing state-backed currency.
His proposal is in line with the central bank's stance that stablecoin issuance should commence with regulated banks, citing compliance requirements such as anti-money laundering and customer checks. Shin also raised concerns about the efficiency of blockchain-based coins in foreign exchange, citing regulatory compliance uncertainty and added costs.
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 cautioned that privately issued tokens pose risks to monetary policy and financial stability, advocating 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.
Notably, the country's first fully regulated stablecoin, KRW1, was launched in February through a partnership between crypto custody service provider BDACS and Woori Bank.