South Korea's Central Bank Governor Emphasizes CBDC and Bank-Issued Tokens

In his inaugural address, Bank of Korea Governor Shin Hyun-song highlighted the importance of central bank digital currencies and bank-issued deposit tokens, omitting any reference to stablecoins as the country considers new cryptocurrency regulations. Shin, who began his term, emphasized the bank's ongoing retail CBDC and deposit-token pilot project and its participation in a cross-border tokenization initiative. He positioned digital currency as part of a broader central banking shift during a period of economic challenges and slower domestic growth. Notably, stablecoins were not mentioned in his remarks, despite being a key issue in policy discussions in Seoul. The governor had previously stated that stablecoins could coexist with CBDCs and deposit tokens in a competitive manner. His speech outlined a model where the central bank would issue a CBDC and commercial banks would provide deposit tokens that can be fully converted into it. Shin also announced plans to increase scrutiny of crypto markets and non-bank finance, expand monitoring of cryptocurrencies, and improve access to data to track financial risks. Additionally, he pledged to modernize currency markets, including introducing 24-hour foreign exchange trading and an offshore settlement system.