PiCK
BOK Nominee Says Won Stablecoin Need Not Be Bank-Led, KYC Capacity Should Guide Choice
Summary
- Shin Hyun-song, the Bank of Korea governor nominee, said bank leadership would not be essential in introducing a won-denominated stablecoin and that the operator should be selected based on know-your-customer (KYC) capabilities.
- Shin said stablecoins and deposit tokens based on a central bank digital currency (CBDC) serve different roles depending on their use cases and should be designed to be optimized for their intended purpose.
- Shin said foreign-exchange transaction regulations should be considered in designing the system, adding that while banks are set to play a major role for now, fintech companies could also participate meaningfully through a consortium structure.
Forecast Trend Report by Period
Shin Hyun-song, the nominee for Bank of Korea governor, said a won-denominated stablecoin does not have to be led by banks and that its operator should be chosen based on know-your-customer, or KYC, capabilities.
Testifying at a parliamentary confirmation hearing on Aug. 15, Shin said stablecoins and deposit tokens based on a central bank digital currency, or CBDC, each have roles depending on their intended use. He said each should be designed and optimized for its specific purpose.
He also indicated that the two systems could operate in parallel rather than as substitutes. As private stablecoins gain broader use globally, their functions need to be distinguished and applied accordingly, he said.
Shin added that foreign-exchange transaction regulations would be an important variable in South Korea and should be taken into account in the institutional design.
On the question of who should run such a system, Shin said the discussion around banks reflects their current strength in KYC capabilities, rather than any requirement that they must take the lead. At this stage, he said, banks are bound to play a large role.
Still, fintech companies could also play a sufficient role if they participate in the form of a consortium, he added. Such a structure is needed to reflect private-sector innovation as well.
Suehyeon Lee
shlee@bloomingbit.ioI'm reporter Suehyeon Lee, your Web3 Moderator.
