The nominee to lead the Bank of Korea, Shin Hyun-song, has proposed a digital money system with a central bank digital currency and bank-issued deposit tokens at its core, supplemented by stablecoins in a secondary capacity. According to Yonhap, Shin stated that he expects central bank digital currencies and deposit tokens to coexist with stablecoins in a competitive and supplementary manner. In his written remarks submitted to parliament, Shin expressed support for introducing a won-based stablecoin, but highlighted the importance of establishing trust in the currency first.
He views stablecoins as useful for trading tokenized assets and facilitating programmable payments, rather than as a replacement for state-backed currency. Shin's proposal aligns with the central bank's stance that stablecoin issuance should commence with regulated banks, citing compliance requirements such as anti-money laundering and customer checks. He also questioned the claim that blockchain-based coins would enhance foreign exchange efficiency, citing regulatory compliance uncertainty and added costs.
Furthermore, Shin 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 that privately issued tokens could pose risks to monetary policy and financial stability, advocating for stringent oversight, including anti-money laundering and customer verification rules. 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 permit non-bank issuers under new legislation. Notably, the country's first fully regulated stablecoin, KRW1, was launched in February through a partnership between crypto custody service provider BDACS and Woori Bank.