Shin Hyun-song: “CBDCs and stablecoins can coexist in a complementary-competitive relationship”

Shin Hyun-song, nominee for governor of the Bank of Korea, acknowledged the role of stablecoins in the digital currency ecosystem and suggested they could coexist with central bank digital currencies (CBDCs).

According to The Hankyoreh on the 6th, in written responses submitted to Rep. Park Sung-hoon of the National Assembly’s Fiscal and Economic Planning Committee (People Power Party), Shin said that “stablecoins have positive functions, such as serving as a means of transaction for tokenized assets,” adding that they “can play a role in the future currency ecosystem.” He also indicated that he is, in principle, in favor of introducing won-backed stablecoins.

However, he made clear that the center of the monetary system should be led by the central bank. “Maintaining trust in money remains a core element,” he said, explaining that “CBDCs issued by the central bank and deposit tokens based on them should be at the heart of the digital currency ecosystem.” He added that stablecoins could be used as a payment instrument for tokenized assets such as cryptoassets, forming a complementary and competitive relationship.

He also reaffirmed the Bank of Korea’s plan to build digital currency infrastructure. Shin said he would “upgrade the payment and settlement infrastructure to help spur private-sector innovation, including banks and fintechs,” adding that he would continue to push ahead with the pilot program, ‘Project Hangang.’ The project focuses on testing the potential uses of deposit tokens (assets that convert bank deposits into a blockchain-based digital form) and whether they can be commercialized.

At the same time, he also noted the need to manage risks stemming from the spread of digital finance. “New risk factors may emerge in the process of linking with the traditional financial system,” he said, adding that he would “preemptively review vulnerabilities and risks and prepare policy response measures.”