Shin Hyun-song, the new governor of the Central Bank of South Korea, gave a message as soon as he took office, giving priority to central bank digital currencies (CBDC) and digital deposit tokens issued by banks. While it was noteworthy that Shin did not mention stablecoins at all in his speech, it was emphasized by many commentators that this area was left out of the discussions about digital asset regulations in the country. In his speech on the first day of his four-year presidential term, Shin drew attention to the bank’s Hangang Pilot Project, which covers retail CBDC and deposit tokens. He also recalled their active role in the Agorá Project, which aims at cross-border tokenization and is spearheaded by the Bank for International Settlements (BIS).
New president’s priorities
Shin Hyun-song, who stands out as an economist in the international arena, is a name with academic studies especially on central banking and financial technologies. In his speech, Shin linked the digital currency issue with the economic slowdown and the weakening growth process in the domestic market; He stated that such transformations will be on the agenda of central banks. According to him, digital currencies; It has the potential to affect many areas, from payments to the functioning of financial markets.
Shin stated that, in addition to existing pilots, they want digital money projects to progress in cooperation with banks. In this context, he stated that the Central Bank will directly issue CBDC, and commercial banks will launch digital deposit tokens that can be fully converted into this money. He also emphasized that stablecoin issuances should strictly be through regulated banks.
Stablecoin emphasis and legal regulations
Stablecoins have been one of the hot topics on the political agenda in South Korea for a while. The Digital Asset Basic Law, which is awaiting discussion in parliament, aims to introduce new rules for the issuance and control of such assets. Shin had previously stated at his confirmation hearing that stablecoins could exist in a “complementary and competitive” way alongside CBDC and digital deposit tokens. Despite this, the fact that he did not mention the names of these currencies in his first statement after taking office raised various questions in the market.
Shin pointed out that the central bank will go beyond payment infrastructure and monitor the cryptocurrency market and traditional non-banking financial institutions more closely. He noted that they will increase more comprehensive data access and market surveillance steps to more efficiently monitor the risks of digital assets and new generation financial instruments.
Modernization steps in money markets
Another important topic on Shin’s agenda was the modernization of foreign exchange and money markets. It was announced that the Central Bank is preparing to develop a new clearing system for overseas payments with 24-hour foreign exchange transactions for the local currency won. These steps, especially in terms of foreign trade and international transactions, are expected to bring financial markets closer to global standards.
It is thought that CBDC and digital token moves in South Korea will make a significant contribution to accelerating financial innovation and shaping regulations in the country. In particular, the new president Shin Hyun-song’s international experience and technological vision are closely followed by industry representatives.
Investors and industry observers are wondering how the government and the central bank will regulate new technologies and how these regulations will shape the transformation in the market. Both legal infrastructure and technical pilot studies are expected to accelerate in the coming months.
