CBDCs and Deposit Tokens Take Center Stage
On Tuesday, June 11, Shin Hyun-song officially began his four-year term as the new governor of the Bank of Korea.
Project Hangang, first launched in 2023, reflects the Bank of Korea’s ambition to modernize payments infrastructure using blockchain technology. The pilot’s expansion into a wholesale CBDC system aims to increase usability for both consumers and financial institutions, with commercial banks expected to issue deposit tokens that are fully convertible into CBDC.
Shin’s Vision: Banks, Not Stablecoins
Shin outlined a future where the central bank issues a digital won (CBDC), while commercial banks provide their own deposit tokens—digital representations of customer deposits—fully backed and instantly exchangeable for CBDC. This model positions regulated banks at the center of digital currency issuance and circulation, rather than private firms or tech startups. The governor’s vision comes at a time when South Korea’s parliament is still debating the Digital Asset Basic Act, legislation that would set rules for stablecoin issuance among other digital assets.
Despite this legislative uncertainty, Shin did not address stablecoins in his speech. This omission stands out given that KRW1, South Korea’s first fully regulated stablecoin pegged to the won, launched in February 2024 through a partnership between BDACS and Woori Bank. On paper, stablecoins are gaining traction; but Shin’s silence suggests they are not a current policy priority for the central bank.
During his confirmation hearings earlier this year, Shin acknowledged stablecoins could play a supplementary role alongside CBDCs and deposit tokens—yet his first public address left them out entirely.
Project Hangang Gets Top Billing
The Bank of Korea is pushing ahead with Project Hangang's second phase in 2024. This stage focuses on testing how retail customers and banks interact with blockchain-based CBDC systems and tokenized deposits. According to coindesk.com, Shin highlighted these pilots as critical to shaping the country’s future payments landscape. In 2023, the Bank of Korea even partnered with Samsung to explore offline CBDC payments—a move intended to ensure resilience during network outages or emergencies.
Shin also pledged to expand monitoring efforts over cryptocurrencies and other nontraditional assets. As part of broader modernization plans, he committed to updating currency markets by enabling 24-hour foreign exchange trading and developing an offshore won settlement system—initiatives designed to better integrate South Korea into global financial flows.
What’s Missing: The Stablecoin Question
Stablecoins remain conspicuously absent from Shin’s agenda despite ongoing debate over whether only banks or also non-bank entities should be allowed to issue won-pegged tokens. The proposed Digital Asset Basic Act has stalled in parliament since early 2024, leaving market participants uncertain about future regulatory frameworks. While Shin previously worked at the Bank for International Settlements (BIS) until March 2026—where he reportedly took a negative stance on stablecoins—his latest remarks offer little clarity on their domestic role.
It is unclear whether Shin's silence signals skepticism or simply a wait-and-see approach as legislative processes unfold. For now, his priorities are clear: advancing state-backed digital money through official channels rather than embracing privately issued alternatives.
What remains unresolved
South Korea’s proposed Digital Asset Basic Act, which would determine whether won-pegged stablecoin issuance is restricted to commercial banks or extended to non-bank entities, remains under legislative consideration, so if lawmakers fail to resolve this debate, the regulatory status of stablecoins like KRW1 will remain unclear even as Governor Shin advances Project Hangang’s second phase.