In his maiden speech as the Bank of Korea's 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 deliberations on new cryptocurrency regulations. Shin, who commenced his four-year term, drew attention to the bank's ongoing pilot projects, including Project Hangang, which focuses on retail CBDCs and deposit tokens, as well as Project Agorá, a cross-border tokenization initiative led by the Bank for International Settlements. He positioned digital currencies as a key component of a broader transformation in central banking, particularly 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, 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 framework, where the central bank would issue a CBDC, while commercial banks would provide deposit tokens that can be fully converted into the CBDC. Shin has advocated for stablecoin issuance to be initiated by regulated banks. In addition to payments, Shin indicated that the central bank would enhance its scrutiny of crypto markets and non-bank finance, expanding its monitoring of cryptocurrencies and other non-traditional assets, while seeking greater access to data to track financial risks.
Furthermore, Shin pledged to take steps to modernize currency markets, including the introduction of 24-hour foreign exchange trading and an offshore won settlement system.