Bank of Korea nominee backs central bank-led digital currency, sees limited role for stablecoins

The nominee, Shin Huyn-song, supported a central bank digital currency model, emphasizing the need for strict anti-money laundering and compliance controls.

What to know:

• Shin Huyn-song, the nominee to become governor of the Bank of Korea, is prioritizing a potential central bank digital currency and bank deposit tokens over privately issued stablecoins.
• Shin said he supported a bank-led issuance model, emphasizing strict anti-money laundering (AML) and compliance controls.
• He expressed doubt about the role of cryptocurrencies as money and their potential to improve foreign exchange efficiency.

Shin Hyun-song, the nominee to lead the Bank of Korea, said a 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 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,” 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 supports introducing a won-based stablecoin, but stressed that trust in the currency must come first, according to Yonhap.

He framed stablecoins as useful tools for trading tokenized assets and enabling programmable payments, not as a replacement for state-backed money.

His proposal aligns with the central bank’s existing 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 these standards.

He also questioned claims that blockchain-based coins would improve foreign exchange efficiency, pointing to uncertainty around regulatory compliance and added costs.

Of cryptocurrencies more broadly, Shin said digital assets fall short of money’s core roles 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 risks to monetary policy and financial stability, and has called for strict oversight including anti-money laundering and customer verification rules.

Shin's remarks come as policymakers debate how far 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 service provider BDACS and Woori Bank.

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