Bank of Korea’s new governor signals CBDC and bank token push, skips stablecoins in key address

The BOK will increase scrutiny of crypto markets and non-bank finance, and will also modernize currency markets for 24-hour foreign exchange trading, he said.

What to know:

• Bank of Korea's new governor Shin Hyun-song prioritized a CBDC and bank-issued deposit tokens in a key address, centering them in Korea’s digital money strategy.
• He omitted stablecoins from his remarks during the Digital Asset Basic Act debate, despite previously supporting a limited, competitive role.
• The BOK will increase scrutiny of crypto markets and non-bank finance, and will also modernize currency markets for 24-hour foreign exchange trading, he said.

Bank of Korea Governor Shin Hyun-song used his first address in office to prioritize central bank digital currencies (CBDCs) and bank-issued deposit tokens, while leaving out any mention of stablecoins as South Korea weighs new crypto rules.

Shin, who began his four-year term Tuesday, pointed to the bank’s ongoing retail CBDC and deposit-token pilot, Project Hangang, and its role in Project Agorá, a cross-border tokenization effort led by the Bank for International Settlements, according to news outlet Chosun.

He framed digital currency as part of a broader shift in central banking during a period of economic strain and slower domestic growth.

The absence of stablecoins from his remarks stood out. The issue has dominated policy debate in Seoul, with lawmakers considering the Digital Asset Basic Act, which would set rules for stablecoin issuance.

Shin had told lawmakers at his confirmation hearing that stablecoins could coexist with CBDCs and deposit tokens in a "supplementary and competitive" manner.

His speech also outlined a bank-led model where the central bank would issue a CBDC, while commercial banks would provide deposit tokens fully convertible into it. Shin has argued that any stablecoin issuance should begin with regulated banks.

Beyond payments, Shin signaled closer scrutiny of crypto markets and non-bank finance. He said the central bank would expand monitoring of cryptocurrencies and other nontraditional assets, and seek broader access to data to track financial risks.

Shin also pledged steps to modernize currency markets, including 24-hour foreign exchange trading and an offshore won settlement system.

More For You

To mitigate risks like sudden withdrawals, policymakers are debating safeguards such as limiting interest payments and offering issuers access to central bank backstops.

What to know:

• Global progress on stablecoin standards has slowed, prompting the BIS and Financial Stability Board to warn that fragmented rules could amplify market risks and encourage regulatory arbitrage.
• To mitigate risks like sudden withdrawals, policymakers are debating safeguards such as limiting interest payments and offering issuers access to central bank backstops.

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