The nominee to lead the Bank of Korea, Shin Hyun-song, proposed that the nation's digital monetary system should primarily consist of a central bank digital currency and bank-issued deposit tokens, with stablecoins playing a secondary, supplementary role. He noted that these digital currencies and tokens can coexist with stablecoins in a competitive and complementary manner. In his written remarks, 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 facilitating the trade of tokenized assets and enabling 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 the need for compliance with anti-money laundering and customer verification requirements. He also raised concerns about the potential of blockchain-based coins to improve 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 as a unit of account, medium of exchange, and store of value.
The Bank of Korea has previously warned of the risks posed by privately issued tokens to monetary policy and financial stability, advocating for strict oversight. Shin's comments come amid ongoing debates among policymakers regarding 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. Recently, the country's first fully regulated stablecoin, KRW1, was launched through a partnership between BDACS and Woori Bank.