Shin Hyun-song, the nominee to head the Bank of Korea, has proposed that the country's digital monetary system be centered around a central bank digital currency and bank-issued deposit tokens, with stablecoins playing a secondary, supplementary role. According to Yonhap, he stated that these two should coexist in a competitive and complementary manner.
In his written remarks submitted to parliament, Shin expressed support for introducing a won-based stablecoin, but stressed that trust in the currency must be established first. He views stablecoins as useful for trading tokenized assets and facilitating programmable payments, rather than as a replacement for state-backed currency.
His proposal is in line with the central bank's existing 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 questioned the claim that blockchain-based coins can improve foreign exchange efficiency, citing regulatory compliance uncertainty and added 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 warned of the potential risks posed by privately issued tokens to monetary policy and financial stability, advocating for strict oversight. Shin's remarks come as policymakers debate 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 BDACS and Woori Bank.