South Korea's central bank chief endorses digital currencies and tokenized deposits in inaugural speech
In his maiden address as Bank of Korea governor, Shin Hyun-song expressed endorsement for CBDCs and deposit tokens, though stablecoins were conspicuously missing from his comments.
In his inaugural public remarks, Shin Hyun-song, the recently installed Governor of the Bank of Korea, has expressed his backing for central bank digital currencies (CBDCs) along with tokenized deposits.
Following his inauguration ceremony held in Seoul on Tuesday, Shin—who is embarking on a four-year tenure—announced that the central bank intends to move forward with the second stage of "Project Hangang," a pilot initiative spearheaded by the Bank of Korea designed to evaluate a wholesale CBDC system built on blockchain technology.
Furthermore, he referenced cross-border cooperation programs, notably the "Agora Project," a multinational collaborative effort that was initiated in April 2024 by the Bank for International Settlements (BIS) together with seven central banks to investigate the tokenization of international payments. According to Shin, these programs "will elevate the status of the Korean won in the digital payment environment."
Despite earlier indications that Shin might be receptive to stablecoins denominated in won, his inaugural address contained no reference to stablecoins whatsoever.
The legislative proposal concerning stablecoins in South Korea continues to face delays, as regulators and parliamentary members remain divided on the question of whether the issuance of won-pegged digital tokens should be restricted exclusively to commercial banks or extended to include non-banking entities such as fintech companies and technology corporations.
Shin flags geopolitical risks
The new governor additionally addressed escalating tensions throughout the Middle East and their impact on petroleum prices, emphasizing that the Bank of Korea needs to adjust to increasing uncertainty stemming from geopolitical disruptions, inflationary forces and transformations in the worldwide economy.
"We must strive for price and financial stability through the operation of prudent and flexible monetary policy," he said.
According to information on the BIS website, Shin held the position of BIS economic adviser beginning in May 2014 through March 2026 and additionally functioned as head of the Monetary and Economic Department starting in January 2025.
In the previous month, he released an academic paper making the argument that stablecoins do not fulfill a fundamental characteristic of money, specifically "unity," due to the fact that blockchain networks are intrinsically fragmented across multiple chains that feature different fees, security protocols and decentralisation levels.
South Korea to test tokenized deposits for government spending
The Ministry of Economy and Finance in South Korea is making preparations to evaluate blockchain-based payment systems for certain government expenditures as a component of a regulatory sandbox that explores distributed ledger technology applications in public finance.
The experimental program will employ tokenized deposits to carry out government operational spending, with a comprehensive implementation scheduled for the fourth quarter of 2026. The opening phase is set to be launched in Sejong City and will incorporate specific conditions including restrictions on timing and spending categories.