BOK Governor Nominee Shin Says CBDCs and Stablecoins Can Coexist as Complements and Rivals

Shin Hyun-song, nominee for governor of the Bank of Korea, said stablecoins have a role to play in the digital-currency ecosystem and can coexist with central bank digital currencies, or CBDCs.

In a written response submitted to Rep. Park Sung-hoon of the National Assembly’s Strategy and Finance Committee, Shin said stablecoins have positive functions, including serving as a means of transacting tokenized assets, the Hankyoreh reported on April 6. He also expressed broad support for the introduction of a won-denominated stablecoin.

Shin stressed, however, that the central bank should remain at the center of the monetary system. Trust in money remains the key element, and CBDCs issued by the central bank and deposit tokens based on them should form the core of the digital-currency ecosystem. Stablecoins, meanwhile, could be used as a payment instrument for tokenized assets such as virtual assets, creating both complementary and competitive relationships.

He also reaffirmed the Bank of Korea’s plan to build digital-currency infrastructure. The central bank will upgrade payment and settlement infrastructure to support innovation by private-sector players including banks and fintech firms, while continuing its pilot program, Project Hangang. The project is focused on testing the use cases and commercial viability of deposit tokens, a blockchain-based digital form of bank deposits.

Shin also addressed the need to manage risks tied to the spread of digital finance. New risk factors could emerge as digital finance becomes more closely linked to the traditional financial system. He said authorities would examine vulnerabilities and risks in advance and prepare policy responses.