New Bank of Korea Governor Prioritizes CBDCs and Tokenized Deposits

Shin Hyun-song, the newly appointed Governor of the Bank of Korea, has officially endorsed the development of central bank digital currencies (CBDCs) and tokenized deposits. In his first public address following his inauguration in Seoul, Shin outlined a vision for modernizing the Korean won's role in the global digital payment ecosystem. The Governor announced the advancement of "Project Hangang," a blockchain-based wholesale CBDC pilot. He also emphasized South Korea's participation in the "Agora Project," a collaborative effort led by the Bank for International Settlements (BIS) and seven other central banks aimed at optimizing cross-border payment tokenization. While the market anticipated comments on stablecoins, Shin remained silent on the matter during his speech. This aligns with his previous academic research, in which he argued that stablecoins fail to meet the core property of "unity" due to the fragmented nature of blockchain networks, varying fees, and differing security levels. Meanwhile, domestic legislation regarding won-pegged stablecoins remains stalled as regulators debate whether issuance should be limited to commercial banks. Beyond digital assets, Shin addressed broader economic headwinds, citing Middle East tensions and their subsequent impact on oil prices. He stressed the need for "prudent and flexible monetary policy" to maintain price and financial stability amidst geopolitical shocks and inflationary pressures. Complementing the central bank's efforts, the Ministry of Economy and Finance is preparing a regulatory sandbox to test blockchain-based payments for government spending. This pilot, utilizing tokenized deposits, will begin in Sejong City with a target for full implementation by the fourth quarter of 2026.