Shin Hyun-song, the nominee to lead the Bank of Korea, stated that a central bank digital currency (CBDC) and bank-issued deposit tokens should serve as the foundation of South Korea’s digital monetary system.
In written remarks submitted to parliament ahead of his April 15 confirmation hearing, Shin argued that private stablecoins should only play a secondary, supplementary role in the economy.
"I expect that central bank digital currencies and deposit tokens will be able to coexist with stablecoins in a manner that is supplementary and competitive to each other," Shin said, according to a Yonhap report.
Focus on regulated issuance
While Shin expressed support for introducing a won-based stablecoin, he emphasized that establishing trust in the currency remains the primary hurdle. He framed stablecoins as functional tools for trading tokenized assets and enabling programmable payments rather than a replacement for state-backed money.
Shin’s proposal aligns with the central bank’s current stance that stablecoin issuance should originate with regulated banks. He cited the necessity of strict anti-money laundering (AML) and customer identity verification as reasons to utilize established lenders that already meet these compliance standards.
He also expressed skepticism regarding the ability of blockchain-based coins to improve foreign exchange efficiency. Shin pointed to the potential for increased regulatory costs and uncertainty surrounding compliance as significant barriers.
Regarding the broader cryptocurrency market, Shin noted that digital assets currently fail to perform the fundamental functions of money, specifically as a unit of account, a medium of exchange, and a store of value.
The Bank of Korea has previously warned that privately issued tokens could threaten monetary policy and financial stability. Regulators continue to call for rigorous oversight and strict customer verification rules.
Policymakers are currently divided on the scope of market access. While regulators favor a bank-led model, some lawmakers are pushing for new legislation that would permit non-bank issuers to enter the space.
South Korea’s first fully regulated stablecoin, KRW1, entered the market in February through a partnership between Woori Bank and crypto custody provider BDACS.
