Bank of Korea Nominee Ties Stablecoin Utility to Bank-Led Issuance

Small merchants will see a reduction in card fees through the implementation of bank-led digital payments. This efficiency is part of a broader digital money system proposed by Bank of Korea governor nominee Shin Hyun-song, who advocates for a framework centered on central bank digital currencies (CBDCs) and bank-issued deposit tokens. Shin conditionally accepts the use of Korean won stablecoins, provided they operate under strict regulation. To ensure compliance with existing financial rules, Shin supports a model where banks lead the issuance of these stablecoins. Under this framework, stablecoins are positioned to serve as tools for trading tokenized assets and supporting programming functions. These assets will coexist complementarily and competitively with deposit tokens within payment and settlement systems. The Bank of Korea is currently testing these mechanisms through Project Hangang, where nine commercial banks, including Kyongnam Bank and iM Bank, are trialing deposit tokens on wholesale CBDC infrastructure to reduce transaction costs for users. These lower costs specifically target areas where payment fees are currently high, resulting in lower card fees for small merchants.