- Shin Hyun-song said CBDC and deposit tokens should play the central role in the digital currency system.
- He said won-denominated stablecoins could play a positive role, but are likely to remain complementary within the existing monetary system.
- He emphasized a bank-led model, AML, and KYC, and said virtual assets face structural limits in replacing fiat currency.
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Shin Hyun-song, nominee for governor of the Bank of Korea, said the digital currency system should be centered on a central bank digital currency, or CBDC, and deposit tokens.
In written responses for his National Assembly confirmation hearing, Shin said a CBDC and commercial-bank deposit tokens built on it should play the central role in the future digital-currency ecosystem, Yonhap News reported on June 13.
He said he agrees in principle with the introduction of won-denominated stablecoins, but maintaining trust in the currency must take priority. While stablecoins could play a positive role in tokenized-asset transactions and programmable functions, they are likely to remain complementary within the existing monetary system.
On issuance, Shin proposed a bank-led model. Citing South Korea’s status as a non-reserve-currency issuer, he said a consortium led by banks with proven compliance capabilities in anti-money laundering, or AML, and know-your-customer, or KYC, rules would be preferable, with participation by non-banks expanded gradually.
He was more cautious on the potential for blockchain to improve the efficiency of foreign-exchange transactions. Shin said it remains unclear whether blockchain can fully comply with existing capital and foreign-exchange regulations and whether any efficiency gains would outweigh the regulatory costs.
Shin also said virtual assets, including stablecoins, do not fully meet the core functions of fiat currency and face structural limits as substitutes for existing currencies.
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