Shin Hyun-song, the candidate to head the Bank of Korea, said a central bank digital currency (CBDC) and deposit tokens issued by banks should form the core of South Korea’s digital monetary system, with stablecoins playing a supporting role.
“I hope that digital currencies and central bank deposit tokens can coexist with stablecoins in a way that is complementary and competitive with each other,” he said, Yonhap reported, citing the Bank of Korea.
In written comments submitted to parliament ahead of his confirmation hearing on April 15, Shin said he supports the introduction of a won-based stablecoin, but stressed that trust in the currency must come first, according to Yonhap.
He framed stablecoins as useful tools for exchanging tokenized assets and enabling programmable payments, not as a replacement for state-backed money.
Their proposal aligns 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 controls, as reasons to start with established lenders that already meet these standards.
He also disputed claims that blockchain-based currencies would improve exchange efficiency, pointing to uncertainty around regulatory compliance and additional costs.
As for cryptocurrencies in general, Shin said digital assets fail to fulfill the core functions of money as a unit of account, medium of exchange, and store of value.
The Bank of Korea has warned that privately issued tokens could pose risks to monetary policy and financial stability, and has called for strict supervision including anti-money laundering and customer verification rules.
Shin’s comments come as policymakers debate the extent to which to open the market. While regulators have pushed for bank-led models, lawmakers have proposed broader frameworks 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 cryptocurrency custody service provider BDACS and Woori Bank.
