In his inaugural address, Bank of Korea Governor Shin Hyun-song emphasized the importance of central bank digital currencies and bank-issued deposit tokens, while notably omitting stablecoins from his discussion. This comes as South Korea is in the process of developing new cryptocurrency regulations.
Shin referenced the bank's ongoing pilot projects, including Project Hangang for retail CBDCs and deposit tokens, as well as its participation in the cross-border tokenization effort, Project Agorá, led by the Bank for International Settlements. He positioned digital currency as a key aspect of the central bank's response to economic challenges and slower growth.
The absence of stablecoins from his remarks is significant, given the current policy debates in Seoul surrounding the potential introduction of the Digital Asset Basic Act, which would 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 model where the central bank would issue a CBDC, with commercial banks providing deposit tokens that are fully convertible into the CBDC. Shin has advocated for stablecoin issuance to be initiated by regulated banks.
In addition to payments, Shin indicated that the bank would increase its scrutiny of crypto markets and non-bank finance, expanding its monitoring of cryptocurrencies and other non-traditional assets to better track financial risks. He also committed to modernizing currency markets, including the introduction of 24-hour foreign exchange trading and an offshore won settlement system.