New Bank of Korea Governor Emphasizes CBDC and Bank-Issued Tokens, Omitting Stablecoins

In his inaugural address, Bank of Korea Governor Shin Hyun-song emphasized the importance of central bank digital currencies and bank-issued tokens, while noticeably excluding stablecoins from his remarks as South Korea considers implementing new cryptocurrency regulations. Shin, who commenced his four-year term, highlighted the bank's ongoing involvement in the retail CBDC and deposit token pilot project, 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 part of a broader evolution in central banking, driven by economic challenges and slower domestic growth. The omission of stablecoins from his speech was striking, given the intense policy debate surrounding the Digital Asset Basic Act, which aims to establish guidelines for stablecoin issuance. Previously, Shin had suggested that stablecoins could coexist with CBDCs and deposit tokens in a complementary and competitive manner. His speech outlined a bank-led approach, where the central bank would issue a CBDC, and commercial banks would provide deposit tokens that are fully convertible into it. Shin has argued that any stablecoin issuance should originate from regulated banks. In addition to payment systems, Shin indicated that the central bank would increase its scrutiny of cryptocurrency markets and non-traditional financial institutions. He stated that the bank would expand its monitoring of cryptocurrencies and other non-conventional assets, and seek greater access to data to track financial risks. Furthermore, Shin pledged to modernize currency markets, including the introduction of 24-hour foreign exchange trading and an offshore won settlement system.