The nominee to lead the Bank of Korea, Shin Hyun-song, has expressed his support for a central bank digital currency, suggesting that it should be the foundation of South Korea's digital monetary system, with stablecoins playing a secondary role. He believes that central bank digital currencies and deposit tokens can coexist with stablecoins in a complementary and competitive manner.
Shin also stated that introducing a won-based stablecoin is a viable option, but emphasized that trust in the currency must be established first. He views stablecoins as useful for trading tokenized assets and enabling programmable payments, rather than replacing state-backed currency. Shin's proposal is in line with the central bank's stance that stablecoin issuance should be regulated and begin with established banks.
He highlighted the need for compliance with anti-money laundering and customer verification rules, which are already met by regulated banks. Shin also expressed skepticism about the potential of blockchain-based coins to improve foreign exchange efficiency, citing regulatory uncertainty and additional costs. Furthermore, he noted that digital assets do not fulfill the core functions of money as a unit of account, medium of exchange, and store of value.
The Bank of Korea has warned about the potential risks of privately issued tokens to monetary policy and financial stability, and has called 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.