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Bank of Korea governor backs CBDCs, deposit tokens in first address
TL;DR
Bank of Korea Governor Shin Hyun-song supports CBDCs and tokenized deposits in his inaugural address. He announced advancements in Project Hangang and highlighted international cooperation on cross-border payment tokenization.
Key points
- Shin Hyun-song supports CBDCs and tokenized deposits
- Advancement of Project Hangang announced
- Involvement in the Agora Project for cross-border payments
- Stablecoin bill remains stalled in South Korea
- Regulatory split over stablecoin issuance
Mentioned in this story
Bank of KoreaShin Hyun-songBank for International Settlements
The newly appointed Governor of the Bank of Korea, Shin Hyun-song, has voiced support for central bank digital currencies (CBDCs) and tokenized deposits in his first public address.
Shin, who began his four-year term after an inauguration ceremony in Seoul on Tuesday, said the central bank will advance the second phase of “Project Hangang,” a Bank of Korea-led pilot project to test a blockchain-based, wholesale CBDC system.
He also pointed to international cooperation efforts, including the “Agora Project,” an international collaborative initiative launched in April 2024 by the Bank for International Settlements (BIS) and seven central banks to explore the tokenization of cross-border payments. Shin said these initiatives “will elevate the status of the Korean won in the digital payment environment.”
While previous reports had suggested Shin was open to won-based stablecoins, he did not mention stablecoins in his inaugural speech.
South Korea’s stablecoin bill remains stalled, with regulators and lawmakers split over whether issuance of won-pegged tokens should be limited to commercial banks or opened up to non-bank players such as fintech and tech firms.
Related: South Korea draft bill puts stablecoins, RWAs under finance laws: Report
Shin flags geopolitical risks
Shin also mentioned rising tensions in the Middle East and its effect on oil prices, saying that the Bank of Korea must adapt to rising uncertainty driven by geopolitical shocks, inflation pressures and shifts in the global economy.
“We must strive for price and financial stability through the operation of prudent and flexible monetary policy,” he said.
Q&A
What is Project Hangang and its significance for CBDCs?
Project Hangang is a pilot project by the Bank of Korea to test a blockchain-based wholesale CBDC system, aiming to enhance the digital payment environment for the Korean won.
What international initiatives is the Bank of Korea involved in regarding digital currencies?
The Bank of Korea is involved in the Agora Project, a collaboration with the Bank for International Settlements and seven central banks to explore tokenization of cross-border payments.
Why is the South Korean stablecoin bill currently stalled?
The stablecoin bill is stalled due to regulatory disagreements over whether issuance should be limited to commercial banks or opened to non-bank entities like fintech firms.
