Bank of Korea Governor Shin Hyun-song began his four-year term in April 2026 by prioritizing central bank digital currencies and deposit tokens in his inaugural address, while conspicuously omitting any mention of stablecoins despite telling lawmakers at his confirmation hearing they could coexist with CBDCs. Shin outlined a bank-led model where the central bank would issue a CBDC while commercial banks provide fully convertible deposit tokens, building on ongoing pilots including Project Hangang and the BIS-led Project Agorá. The policy direction comes as South Korean lawmakers consider the Digital Asset Basic Act to regulate stablecoin issuance, amid international warnings from the BIS and Financial Stability Board that fragmented stablecoin rules could amplify market risks and encourage regulatory arbitrage. The Bank of Korea will also expand monitoring of crypto markets and non-bank finance while modernizing currency markets for 24-hour foreign exchange trading and establishing an offshore won settlement system.
Bank of Korea's Digital Currency Strategy and Pilot Programs
- ▪Bank of Korea Governor Shin Hyun-song began his four-year term on Tuesday, April 2026
- ▪Bank of Korea Governor Shin Hyun-song framed digital currency as part of a broader shift in central banking during a period of economic strain and slower domestic growth
- ▪The Bank of Korea is participating in Project Agorá, a cross-border tokenization effort led by the Bank for International Settlements
- ▪Bank of Korea Governor Shin Hyun-song outlined a bank-led model where the central bank would issue a CBDC while commercial banks would provide deposit tokens fully convertible into it
- ▪Bank of Korea Governor Shin Hyun-song used his first address in office to prioritize central bank digital currencies and bank-issued deposit tokens
- ▪The Bank of Korea is conducting an ongoing retail CBDC and deposit-token pilot called Project Hangang
Stablecoin Policy and Regulatory Debate
- ▪Bank of Korea Governor Shin Hyun-song told lawmakers at his confirmation hearing that stablecoins could coexist with CBDCs and deposit tokens in a supplementary and competitive manner
- ▪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
- ▪Bank of Korea Governor Shin Hyun-song has argued that any stablecoin issuance should begin with regulated banks
- ▪Bank of Korea Governor Shin Hyun-song did not mention stablecoins in his first address in office
- ▪South Korean lawmakers are considering the Digital Asset Basic Act, which would set rules for stablecoin issuance
Expanded Financial Oversight and Market Modernization
- ▪The Bank of Korea will increase scrutiny of crypto markets and non-bank finance
- ▪The Bank of Korea will seek broader access to data to track financial risks
- ▪The Bank of Korea will expand monitoring of cryptocurrencies and other nontraditional assets
- ▪The Bank of Korea will modernize currency markets for 24-hour foreign exchange trading
Perspective of Bank of Korea Governor Shin Hyun-song
- ▪Bank of Korea Governor Shin Hyun-song views central bank digital currencies and deposit tokens as the primary pillars of South Korea's digital currency framework
Perspective of Commercial banks in South Korea
- ▪Commercial banks in South Korea would issue deposit tokens fully convertible into central bank digital currency under the Bank of Korea's proposed model
Perspective of Bank for International Settlements and Financial Stability Board
- ▪The Bank for International Settlements views fragmented stablecoin rules as a threat that could amplify market risks
- ▪The Financial Stability Board warns that inconsistent stablecoin regulation could encourage regulatory arbitrage across jurisdictions
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