Shin Hyun-song, nominated to lead the Bank of Korea, said central bank digital currency (CBDC) and bank-issued deposit tokens should form the core of South Korea’s digital money system, with stablecoins playing a secondary role.
“I expect central bank digital currencies and deposit tokens to be able to be complementary and competitive with stablecoins,” he said. Yonhap reported, citing Bank of Korea.
In written remarks submitted to parliament ahead of his confirmation hearing on April 15, Shin said he supported the introduction of a win-based stablecoin, but stressed that trust in the currency must come first, according to Yonhap.
It developed stablecoins as useful tools for enabling the trading of tokenized assets and programmable payments, not as a substitute for state-backed money.
His proposal is in line with the central bank’s current position that stablecoin issuance should begin with regulated banks. Shin pointed to compliance demands such as anti-money laundering and customer checks as reasons to start with established lenders, which already meet those standards.
He also questioned claims that blockchain-based coins would improve foreign exchange performance, pointing to uncertainty around regulatory compliance and additional costs.
Regarding cryptocurrencies, Shin said digital assets fall short of money’s primary role as a unit of account, a medium of exchange and a store of value.
The Bank of Korea has warned that privately issued tokens could pose a threat to monetary policy and financial stability, and has called for stricter oversight, including anti-money laundering and customer verification rules.
Shin’s remarks come at a time when policymakers are debating how far to open up the market. While regulators have emphasized bank-led models, lawmakers have proposed a broader framework that would allow non-bank issuers under the new legislation.
The country’s first fully regulated stablecoin, KRW1, Debuted in February. Through a partnership between crypto custody service provider BDACS and Woori Bank.