The newly appointed Governor of the Bank of Korea, Shin Hyun-song, has expressed support for central bank digital currencies (CBDCs) of launching a digital Won pilot and tokenized deposits in his first public remarks.
Speaking after his inauguration in Seoul on Tuesday, Shin said the central bank will move forward with the second phase of “Project Hangang,” a pilot program designed to test a blockchain-based wholesale CBDC system. The initiative is part of South Korea’s broader effort to modernize its payment infrastructure and prepare for the digital economy.
Korea advances digital currency plans amid global coordination
Shin demonstrated how international cooperation helps create the future of digital payment systems. He pointed to the “Agora Project,” a cross-border initiative launched in 2024 by the Bank for International Settlements and several central banks, which aims to explore token-based payment systems.
Collaborative efforts between nations will enhance the Korean won’s value as an international currency, according to Shin. He did not mention stablecoins during his speech, although previous reports indicated his support for stablecoins based on the won.
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Your training data extends until the month of October in the year 2023. The South Korean government has not yet reached a final decision about the appropriate methods to control stablecoins. There’s a debate between lawmakers and regulators about whether the issuance of won-pegged tokens should be reserved for traditional banks or whether fintech and tech companies should be allowed to issue as well. Shin described multiple economic threats which included Middle Eastern political conflicts that produced changes in oil market prices.
The central bank needs to adopt “prudent and flexible” policies according to him because those policies will help protect price stability while preventing financial dangers. Shin dedicated more than ten years to work at the Bank for International Settlements before taking his current job which involved him serving as both an economic advisor and the head of the Monetary and Economic Department.
He established in his recent academic paper that stablecoins do not possess the essential monetary characteristic of unity because blockchain networks operate as separate systems with different cost structures and security measures and levels of decentralization. The South Korean government intends to conduct testing of blockchain-based payment systems, which will be used to process its official expenses. The Ministry of Economy and Finance plans to launch a pilot using tokenized deposits to handle selected public expenses, with a wider rollout expected by late 2026.
The testing phase will start in Sejong City while officials assess the potential of using distributed ledger technology for financial management in public sector operations.
