According to Shin Hyun-song, the nominee to head the Bank of Korea, a central bank digital currency and bank-issued deposit tokens should be the foundation of South Korea's digital financial system, with stablecoins serving a secondary purpose. He stated that these two should coexist and complement each other, as reported by Yonhap. In his written remarks to parliament, Shin expressed support for introducing a stablecoin pegged to the won but emphasized that trust in the currency must be established first. He views stablecoins as useful for trading tokenized assets and facilitating programmable payments, rather than replacing state-backed currencies.
Shin's proposal is in line with the central bank's stance that stablecoin issuance should be initiated by regulated banks, citing the need for compliance with anti-money laundering and customer verification requirements. He also questioned the claim that blockchain-based coins can improve foreign exchange efficiency due to regulatory uncertainties and added costs. Shin noted that digital assets lack the core functions of money, including being a unit of account, medium of exchange, and store of value.
The Bank of Korea has warned that privately issued tokens could pose risks to monetary policy and financial stability, calling for strict oversight. Shin's comments 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.