South Korea's new central bank governor takes office! Promises to expand CBDC and deposit tokens, but does not mention Korean won stablecoins

Former BIS senior executive Shin Hyun-song takes office as South Korea’s central bank governor, declaring a flexible policy to address inflationary pressures caused by Middle Eastern conflicts. He will promote the second phase of the “Hangang Project,” expanding the application of CBDC and deposit tokens.

Shin Hyun-song (Shin Hyun-song), a former senior executive at the Bank for International Settlements (BIS), officially assumes the position of Governor of the Bank of Korea (BOK). In his inaugural speech, Shin Hyun-song announced that he will respond to inflationary pressures from Middle Eastern geopolitics through flexible monetary policy, and promote blockchain-based financial innovations such as central bank digital currencies (CBDC) and deposit tokens.

South Korea’s central bank expands CBDC and deposit token applications

Protecting the stability of the payment and settlement system and promoting digital financial transformation are core policies during Shin Hyun-song’s tenure. He pledged to work with the government to promote 24-hour foreign exchange trading and establish an offshore Korean won settlement system to enhance the international status of the won. To prepare for future digital currency systems, the Bank of Korea will expand the use of CBDC and deposit tokens through the second phase of the “Hangang Project,” and actively participate in international collaborations such as “Project Agora” to strengthen the won’s competitiveness in global payment networks.

Expanding non-bank systemic risk monitoring, no mention of Korean won stablecoin

Although Shin Hyun-song did not mention the Korean won stablecoin pegged to the won in his speech—despite stablecoins playing an indispensable role in South Korea’s recent digital transformation wave—the new governor’s first policy declaration did not include any policy stance on stablecoins.

Regarding the increasingly blurred line between Korea’s banking and non-banking sectors, Shin Hyun-song pointed out that traditional regulatory frameworks are insufficient to cope with complex systemic risks. The Bank of Korea will incorporate market price indicators to strengthen early warning functions, expand information collection, and include off-balance-sheet transactions and non-traditional financial products of non-bank institutions in analysis, actively preventing potential financial crises.

Korea’s central bank will actively participate in national structural reforms

In response to demographic changes, growing income inequality, and deep-rooted economic issues such as real estate and household debt, Shin Hyun-song believes that structural factors are key variables affecting monetary policy transmission. He declared that the Bank of Korea will no longer be limited by traditional functions, and will propose specific policy recommendations based on in-depth economic research to help guide the country’s economic restructuring in a positive direction.

• This article is reprinted with permission from: 《Chain News》
• Original title: “South Korea’s Central Bank Governor’s Inaugural Speech: Expanding CBDC and Deposit Tokens, No Mention of Korean Won Stablecoin”
• Original author: Co2