The nominee to lead the Bank of Korea, Shin Hyun-song, has expressed his support for a central bank digital currency and deposit tokens as the foundation of South Korea's digital monetary system, with stablecoins playing a supplementary role. According to Yonhap, Shin stated that he expects central bank digital currencies and deposit tokens to coexist with stablecoins in a competitive and complementary manner. In his written remarks submitted to parliament, Shin highlighted the need for trust in the currency and emphasized that stablecoins should be used for trading tokenized assets and facilitating programmable payments, rather than replacing state-backed currency. His proposal is in line with the central bank's stance that stablecoin issuance should be initiated by regulated banks, citing compliance requirements such as anti-money laundering and customer checks.
Shin also expressed skepticism about the potential of blockchain-based coins to improve foreign exchange efficiency, citing regulatory uncertainty and added costs. Furthermore, he noted that digital assets fall short of fulfilling the core functions of money, including serving as a unit of account, medium of exchange, and store of value. The Bank of Korea has previously warned that privately issued tokens pose risks to monetary policy and financial stability, and has called 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 allow non-bank issuers under new legislation.