New Bank of Korea Governor Emphasizes CBDC and Bank-Issued Tokens, Omits Stablecoins in Inaugural Address

In his maiden speech, Bank of Korea Governor Shin Hyun-song highlighted the importance of central bank-issued digital currencies and bank-issued deposit tokens, noticeably excluding stablecoins from his remarks as South Korea considers new cryptocurrency regulations. Shin, who commenced his four-year term, referenced the bank's ongoing retail central bank digital currency and deposit-token pilot project, known as Project Hangang, and its participation in Project Agorá, a cross-border tokenization initiative led by the Bank for International Settlements. He positioned digital currency as a key component of a broader transformation in central banking, particularly during a period of economic challenges and slower domestic growth. The omission of stablecoins from his address was striking, given the intense policy debate surrounding them in Seoul, where lawmakers are deliberating on the Digital Asset Basic Act, which aims to establish guidelines for stablecoin issuance. Previously, Shin had suggested that stablecoins could coexist with central bank digital currencies and deposit tokens in a supplementary and competitive manner. His speech outlined a model where the central bank would issue a digital currency, while commercial banks would provide deposit tokens that are fully convertible into it, with Shin advocating for stablecoin issuance to be initiated by regulated banks. Additionally, Shin indicated that the central bank would increase scrutiny of cryptocurrency markets and non-traditional financial institutions, seeking broader access to data to monitor financial risks. He also pledged to modernize currency markets, including the introduction of 24-hour foreign exchange trading and an offshore won settlement system.