The Bank of Korea's nominee, Shin Hyun-song, has expressed his support for a central bank digital currency model, suggesting that it should be at the core of South Korea's digital money system, alongside bank-issued deposit tokens, with stablecoins serving as a supplementary tool. In his written remarks, Shin noted that trust in the currency is paramount and emphasized the importance of introducing a won-based stablecoin, with an initial focus on regulated banks to ensure compliance with anti-money laundering and customer verification requirements.
He views stablecoins as useful for tokenized asset trading and programmable payments, but not as a replacement for state-backed currencies. Shin's proposal is in line with the central bank's existing stance, which prioritizes the involvement of regulated banks in stablecoin issuance.
He also raised concerns about the potential risks associated with blockchain-based coins, including regulatory compliance uncertainty and added costs. Furthermore, Shin emphasized that digital assets do not fully meet the core functions of money, including serving as a unit of account, medium of exchange, and store of value. His comments come as policymakers are debating the extent to which the market should be opened up, with regulators advocating for bank-led models and lawmakers proposing broader frameworks that would allow non-bank issuers under new legislation.