New Bank of Korea Governor Emphasizes CBDCs and Bank Tokens in Inaugural Address

In his maiden speech, Bank of Korea Governor Shin Hyun-song highlighted the importance of central bank digital currencies and bank-issued tokens, while notably omitting stablecoins from his remarks as South Korea considers new cryptocurrency regulations. Shin, who assumed office on Tuesday, referenced the bank's ongoing retail CBDC pilot project and its participation in a global tokenization initiative. He positioned digital currencies as a key aspect of the central bank's strategic shift amidst economic challenges and sluggish domestic growth. The omission of stablecoins from his speech was striking, given the intense policy discussions 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 framework where the central bank would issue a CBDC, and commercial banks would provide fully convertible deposit tokens. Shin also emphasized the need for closer monitoring of crypto markets and non-bank financial institutions, seeking expanded access to data to track potential financial risks. Additionally, he pledged to modernize currency markets, including the introduction of 24-hour foreign exchange trading and an offshore settlement system for the Korean won.