In his first official 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 amidst South Korea's ongoing discussions on new cryptocurrency regulations. Shin, who commenced his four-year term, drew attention to the bank's participation in Project Hangang, a retail CBDC and deposit-token pilot, and Project Agorá, a cross-border tokenization initiative led by the Bank for International Settlements. He positioned digital currency as a key aspect of the evolving central banking landscape during a period of economic challenges and slower domestic growth.
Notably, Shin's remarks did not mention stablecoins, a topic that has been at the forefront of policy discussions in Seoul, with lawmakers considering the Digital Asset Basic Act to establish rules 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 model, where the central bank would issue a CBDC and commercial banks would provide deposit tokens that are fully convertible into it, with Shin advocating for regulated banks to initiate any stablecoin issuance. Furthermore, Shin indicated that the central bank would increase scrutiny of crypto markets and non-traditional financial institutions, expanding its monitoring of cryptocurrencies and other non-conventional assets to better track financial risks. He also pledged to modernize currency markets by introducing 24-hour foreign exchange trading and an offshore won settlement system.