The nominee to lead the Bank of Korea, Shin Hyun-song, has expressed his support for a central bank digital currency, stating that it and bank-issued deposit tokens should be at the forefront 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 competitive and supplementary manner. In his written remarks, Shin emphasized the need for trust in the currency to come first and framed stablecoins as useful for trading tokenized assets and enabling programmable payments, rather than replacing state-backed money.
His proposal is in line with the central bank's position that stablecoin issuance should begin with regulated banks, citing compliance demands such as anti-money laundering and customer checks. Shin also questioned the claim that blockchain-based coins would improve foreign exchange efficiency, citing regulatory compliance uncertainty and added costs. He noted that digital assets fall short of money's core roles as a unit of account, a medium of exchange, and a store of value.
The Bank of Korea has warned of the potential risks of privately issued tokens to monetary policy and financial stability, calling for strict oversight. Shin's remarks come as policymakers debate the market's future, with regulators pushing for bank-led models and lawmakers proposing broader frameworks that would allow non-bank issuers under new legislation.