In his inaugural address as governor, Shin Hyun-song emphasized the importance of central bank digital currencies (CBDCs) and commercial bank-issued deposit tokens while conspicuously omitting any reference to stablecoins. This comes at a time when South Korea is contemplating new regulations for cryptocurrencies.
Shin assumed his role on Tuesday with a four-year mandate, highlighting the Bank of Korea’s active involvement in Project Hangang, a pilot program for retail CBDCs and deposit tokens. Additionally, he mentioned the bank’s participation in Project Agorá, an international initiative led by the Bank for International Settlements, as reported by Chosun.
He characterized digital currencies as integral to a wider transformation within central banking amid economic challenges and decelerating domestic growth. Notably, his omission of stablecoins was significant given their prominence in ongoing policy discussions in Seoul. Lawmakers are deliberating the Digital Asset Basic Act, which aims to establish guidelines for issuing stablecoins.
Previously, at his confirmation hearing, Shin had suggested that stablecoins could operate alongside CBDCs and deposit tokens in a “supplementary and competitive” fashion. His speech also described a model where the central bank would issue a CBDC while commercial banks issued deposit tokens exchangeable with it. He advocated for any stablecoin issuance to be managed by regulated banks.
Shin indicated that beyond payment systems, there would be increased oversight of crypto markets and non-bank financial sectors. He announced plans to enhance surveillance of cryptocurrencies and other unconventional assets, along with improved data access to identify financial risks.
Further, Shin committed to modernizing currency markets through the implementation of round-the-clock foreign exchange trading and an offshore won settlement system.