The nominee to lead the Bank of Korea, Shin Hyun-song, has proposed a digital money system centered around central bank digital currencies and bank-issued deposit tokens, with stablecoins playing a secondary role. 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 trading tokenized assets and facilitating programmable payments, rather than replacing state-backed currency. Shin's proposal aligns with the central bank's stance that stablecoin issuance should begin with regulated banks, citing compliance demands such as anti-money laundering and customer checks.
He also questioned the potential of blockchain-based coins to improve foreign exchange efficiency, citing regulatory compliance uncertainty and added costs. Furthermore, Shin noted that digital assets fall short of fulfilling money's core functions as a unit of account, medium of exchange, and store of value. The Bank of Korea has warned of the risks posed by privately issued tokens to monetary policy and financial stability, advocating for strict oversight.
Shin's remarks come amidst ongoing debates among policymakers on how to regulate the market, with regulators pushing for bank-led models and lawmakers proposing broader frameworks that would allow non-bank issuers under new legislation.