In his inaugural address, Bank of Korea Governor Shin Hyun-song emphasized the importance of central bank digital currencies and bank-issued tokens, while notably omitting stablecoins from his discussion. This comes as South Korea is in the process of formulating new cryptocurrency regulations. Shin highlighted the bank’s participation in Project Hangang, a retail central bank digital currency pilot, and Project Agorá, a cross-border tokenization initiative. He views digital currencies as a key component of the central bank’s strategy to navigate economic challenges and slower growth.
The governor’s silence on stablecoins is significant, given the current policy debate surrounding the Digital Asset Basic Act, which aims to establish guidelines for stablecoin issuance. Previously, Shin suggested that stablecoins could coexist with central bank digital currencies and deposit tokens in a complementary and competitive manner.
His speech outlined a framework where the central bank would issue a digital currency, and commercial banks would provide fully convertible deposit tokens. Additionally, Shin announced plans to increase scrutiny of cryptocurrency markets and non-traditional financial institutions, and to enhance the bank’s access to data for monitoring financial risks. He also pledged to modernize the country’s currency markets, including the introduction of 24-hour foreign exchange trading and an offshore settlement system for the Korean won.