Shin Hyun-song’s Inaugural Focus on Digital Innovation
Bank of Korea Governor Shin Hyun-song used his August 19, 2025, inauguration speech to signal a clear commitment to advancing CBDC and deposit tokens, highlighting their role in modernizing payment systems and supporting the Korean won’s global position. Shin, who previously led the BIS Monetary and Economic Department, emphasized stability amid supply shocks while pledging active involvement in structural economic reforms. This marks a deliberate pivot toward blockchain-based finance, building on Project Hangang’s second phase to expand CBDC testing and deposit token integration.
Project Hangang and International Collaboration
The Bank of Korea plans to deepen CBDC development through Project Hangang while collaborating on global initiatives like Project Agora. These efforts aim to enhance cross-border payments and strengthen the won’s international standing. Shin’s speech omitted any mention of won-backed stablecoins, despite ongoing legislative pushes for a local stablecoin framework under the Digital Asset Basic Act. This silence contrasts with his earlier BIS report questioning stablecoins’ ability to replace currencies, though recent reports suggest a more open stance on co-existence with CBDC.
Stablecoin Omission Sparks Market Questions
The absence of stablecoins in Shin’s remarks has drawn attention, especially as major Korean financial institutions prepare for potential legalization. The Digital Asset Basic Act remains stalled until after the June 3 regional elections, creating uncertainty for won-pegged stablecoins. Analysts note that prioritizing CBDC and deposit tokens could limit private-sector innovation in stablecoins, potentially preserving central bank control over digital money. This approach aligns with South Korea’s cautious regulatory history on crypto while advancing controlled digital currency experiments.
Implications for South Korea’s Crypto Future
The policy emphasis on CBDC and deposit tokens could accelerate institutional adoption and improve payment efficiency, but it may slow private stablecoin growth compared to more permissive jurisdictions. With Bitcoin and Ethereum showing resilience amid global regulatory shifts, South Korea’s stance may influence regional dynamics in Asia. Investors should monitor Project Hangang updates and the Digital Asset Basic Act progress for clearer signals on stablecoin viability. Overall, Shin’s vision reinforces a measured embrace of digital finance focused on security and national currency strength.
