Shin Hyun-song, nominee to lead the Bank of Korea, stated that a central bank digital currency (CBDC) and bank-issued deposit tokens should form the core of South Korea’s digital money system.
He anticipates that CBDCs and deposit tokens will coexist with stablecoins in a supplementary and competitive manner. Shin supports introducing a won-based stablecoin but stressed that trust in the currency must come first.
Shin framed stablecoins as useful for trading tokenized assets and enabling programmable payments, not as a replacement for state-backed money. This proposal aligns with the central bank’s existing stance that stablecoin issuance should begin with regulated banks.
He cited compliance demands like anti-money laundering and customer checks as reasons to start with established lenders. Shin also questioned claims that blockchain-based coins would improve foreign exchange efficiency, pointing to regulatory uncertainty and added costs.
Regarding cryptocurrencies, Shin noted that digital assets fall short of money's core functions: a unit of account, a medium of exchange, and a store of value.
The Bank of Korea has warned that privately issued tokens could risk monetary policy and financial stability, calling for strict oversight.
Shin's comments come as policymakers debate market openness. While regulators favor bank-led models, lawmakers propose broader frameworks allowing non-bank issuers.
In February, South Korea saw its first fully regulated stablecoin, KRW1, debut through a partnership between BDACS and Woori Bank.