In his first official speech, Bank of Korea Governor Shin Hyun-song emphasized the importance of central bank-issued digital currencies and bank-issued tokens, omitting any reference to stablecoins amidst ongoing discussions on new cryptocurrency regulations in South Korea. Governor Shin, who started his term on Tuesday, highlighted the bank's participation in the retail central bank digital currency and deposit token pilot project, known as Project Hangang, and its involvement in Project Agorá, a cross-border tokenization initiative led by the Bank for International Settlements. He positioned digital currencies as a key aspect of the central bank's strategy during a period of economic challenges and slower domestic growth. Notably, stablecoins were not mentioned in his remarks, despite being a major topic of debate in Seoul's policy circles, with lawmakers considering the Digital Asset Basic Act to establish rules for stablecoin issuance.
Previously, Governor Shin had suggested that stablecoins could coexist with central bank digital currencies and deposit tokens in a complementary and competitive manner. His speech outlined a model where the central bank would issue a digital currency, while commercial banks would provide tokens that can be fully converted into it, with Shin advocating for stablecoin issuance to be initiated by regulated banks.
Additionally, he signaled increased scrutiny of cryptocurrency markets and non-bank financial institutions, with plans to expand monitoring of cryptocurrencies and other non-traditional assets, as well as seeking broader access to data to track financial risks. Governor Shin also pledged to modernize currency markets, including the introduction of 24-hour foreign exchange trading and an offshore won settlement system.