The nominee for the Bank of Korea's leadership, Shin Hyun-song, has expressed his support for a central bank-led digital currency system. In this framework, bank-issued deposit tokens and central bank digital currencies would be the primary components, with stablecoins playing a secondary role. According to Shin, these two can coexist and complement each other.
He suggested introducing a won-based stablecoin, but emphasized that trust in the currency is paramount. Shin views stablecoins as useful for tokenized asset trading and programmable payments, rather than as a replacement for state-backed currency. His stance aligns with the central bank's position that stablecoin issuance should be initiated by regulated banks, due to the need for strict compliance with anti-money laundering and customer verification rules.
Shin also raised concerns about the regulatory compliance and added costs of blockchain-based coins, and questioned their potential to improve foreign exchange efficiency. Furthermore, he stated that digital assets do not fulfill the core functions of money, including being 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 advocated for strict oversight. Shin's remarks come at a time when policymakers are debating 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. Recently, the country's first fully regulated stablecoin, KRW1, was launched through a partnership between crypto custody service provider BDACS and Woori Bank.