The Bank of Korea's nominee, Shin Hyun-song, has expressed his support for a digital currency system led by the central bank, emphasizing the importance of strict regulations and compliance controls. According to Shin, a central bank digital currency and bank-issued deposit tokens should be the foundation 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 supplementary and competitive manner. Shin also suggested 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 enabling programmable payments, rather than as a replacement for state-backed currency.
Shin's proposal is in line with the central bank's existing stance that stablecoin issuance should begin with regulated banks, citing compliance demands such as anti-money laundering and customer checks. He also expressed skepticism about 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 the core functions of money as a unit of account, medium of exchange, and store of value. The Bank of Korea has previously warned that privately issued tokens could pose risks to monetary policy and financial stability, and has called for strict 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, with regulators pushing for bank-led models and lawmakers proposing broader frameworks that would allow non-bank issuers under new legislation.