The Bank of Korea’s newly appointed governor, Shin Hyun-song, has signalled a forward-looking approach to digital finance, pledging support for blockchain innovation while prioritizing monetary stability in his first official address.
Speaking Tuesday at the central bank’s headquarters in Seoul, Shin began his four-year term by outlining a dual agenda: safeguarding the economy against global shocks and positioning South Korea at the forefront of next-generation financial systems. A former senior official at the Bank for International Settlements, Shin emphasized the importance of resilient payment infrastructure in an increasingly digital world.
CBDCs take centre stage in digital finance strategy
A key highlight of Shin’s speech was the Bank of Korea’s renewed focus on central bank digital currencies (CBDCs). He confirmed plans to expand pilot programs under the second phase of Project Hangang, alongside exploring deposit tokens as part of a broader digital payments framework.
According to Shin, these initiatives will not only enhance the efficiency and security of domestic transactions but also strengthen the global standing of the Korean won. The central bank also intends to collaborate on international efforts such as Project Agora, signalling a more active role in shaping cross-border payment systems.
His remarks suggest a strategic pivot back toward state-backed digital currencies, especially after earlier reports indicated a pause in CBDC development amid rising private-sector innovation.
Silence on stablecoins raises questions
Notably absent from the governor’s speech was any direct mention of Korean won-pegged stablecoins, despite their growing relevance in the country’s digital economy.
This omission comes at a time when policymakers, under President Lee Jae-myung, are working to introduce the Digital Asset Basic Act, a comprehensive regulatory framework expected to legitimize and guide the use of stablecoins and other crypto assets. However, progress on the bill has slowed, with further discussions postponed until after the upcoming regional elections.
While Shin previously expressed skepticism about stablecoins during his tenure at the BIS, arguing they could fragment the monetary system, recent reports suggest his stance has evolved. He is now believed to support a model where stablecoins coexist with CBDCs, though his latest remarks indicate the central bank’s immediate priority remains firmly on sovereign digital currency development.
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