The nominee for the Bank of Korea, Shin Hyun-song, has expressed his support for a central bank digital currency, suggesting that it should be the cornerstone of South Korea's digital financial system, with stablecoins playing a supplementary role. In his written remarks, Shin noted that trust in the currency is paramount and that stablecoins should be introduced with a won-based model. He views stablecoins as useful for specific applications, such as tokenized assets and programmable payments, but not as a replacement for traditional currency. Shin's proposal is in line with the central bank's stance that stablecoin issuance should be led by regulated banks, citing the need for compliance with anti-money laundering and customer verification regulations.
He also questioned the potential benefits of blockchain-based coins in improving foreign exchange efficiency, citing regulatory uncertainty and added costs. Furthermore, Shin stated that digital assets currently fall short of fulfilling the core functions of money, including serving as 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, advocating for strict oversight. Shin's comments come amid ongoing discussions among policymakers about the future of the market, with regulators pushing for bank-led models and lawmakers proposing broader frameworks that would allow non-bank issuers under new legislation.