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 currency system, with stablecoins playing a secondary role.
“I expect 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 remarks submitted to Parliament ahead of his confirmation hearing on April 15, Shin said he supported the introduction of a stable currency based on the won, but stressed that trust in the currency should come first, according to Yonhap.
He presented stablecoins as useful tools for exchanging tokenized assets and enabling programmable payments, not as a replacement for state-backed money.
His proposal aligns with the central bank’s current position that the issuance of stablecoins should begin with regulated banks. Shin pointed to compliance requirements such as anti-money laundering and customer checks as reasons to start with established lenders, which already meet these standards.
He also questioned claims that blockchain-based coins would improve exchange efficiency, highlighting uncertainty over regulatory compliance and additional costs.
Regarding cryptocurrencies more generally, Shin said digital assets do not fulfill money’s fundamental roles 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 called for strict oversight, including anti-money laundering and customer verification rules.
Shin’s remarks come as policymakers debate how much to open the market. While regulators have pushed for bank-led models, lawmakers have proposed broader frameworks that would allow non-bank issuers under new legislation.
The country’s first fully regulated stablecoin, KRW1, debuted in February through a partnership between crypto custody provider BDACS and Woori Bank.
