Bank of Korea's New Governor Prioritizes CBDCs Over Stablecoins in First Policy Address

In brief

• New Bank of Korea Governor Shin Hyun-song emphasized central bank digital currencies and bank-issued deposit tokens in his first policy address.
• The governor highlighted payment system stability through Project Hangang while notably omitting any mention of stablecoins.
• The address comes amid ongoing legislative debates over stablecoin regulation in South Korea.

Bank of Korea Governor Shin Hyun-song, who began his four-year term Tuesday, delivered his first address in office prioritizing central bank digital currencies and bank-issued deposit tokens while omitting any mention of stablecoins.

Per reports in local media, the governor opened his address by declaring, “In this time of transition, we must again ask what the role of the Central Bank is.”

Shin stated that through the second phase of its retail CBDC and deposit token pilot Project Hangang, the bank would, “increase the usability of CBDC and deposit tokens,” while also highlighting its role in cross-border tokenization effort Project Agora.

Silence on stablecoins

The omission of stablecoins marks a shift from Shin's earlier position. During his confirmation hearings, he acknowledged a role for private stablecoins, stating that they would, "be able to coexist complementarily and competitively with deposit tokens” and would play a "sufficient role" within the future currency ecosystem.

Meanwhile, KRW1 debuted in February as South Korea's first fully regulated stablecoin through a partnership between crypto custody service provider BDACS and Woori Bank. The country’s Digital Asset Basic Act, which remains under legislative consideration, would set rules for digital assets including stablecoin issuance.