South Korea may move closer to establishing a comprehensive digital currency framework as Bank of Korea (BOK) governor nominee Shin Hyun-song outlined his views on the future of digital money ahead of his confirmation hearing.
In written responses submitted to the National Assembly’s Finance and Economy Committee, Shin emphasized that central bank digital currency (CBDC) and bank-issued deposit tokens should form the foundation of the country’s digital financial infrastructure.
His comments signal a potential policy direction that combines central bank oversight with participation from commercial banks.
According to Shin, a CBDC issued by the central bank could serve as a trusted settlement layer within the financial system, while deposit tokens issued by commercial banks would allow financial institutions to offer digital payment services to consumers and businesses.
This two-tier structure is designed to maintain financial stability while supporting innovation in digital payments.
South Korea has been actively exploring digital currency technologies in recent years. The Bank of Korea has already conducted several research initiatives and pilot programs aimed at testing the technical feasibility of a CBDC and its potential applications within the domestic financial system.
The proposed approach reflects a broader global trend among central banks seeking to modernize payment infrastructure while maintaining regulatory control over monetary systems.
By combining CBDCs with bank-issued digital tokens, policymakers aim to preserve the role of traditional financial institutions while introducing more efficient digital payment mechanisms.
Shin also stressed the importance of balancing technological innovation with financial stability and regulatory oversight.
As digital assets and blockchain-based financial services continue to expand globally, central banks are increasingly examining how digital currencies could fit within existing financial frameworks.
If confirmed, Shin’s leadership at the Bank of Korea could influence the pace and direction of the country’s digital currency development, including further experimentation with CBDC systems and collaboration with commercial banks.
South Korea is widely considered one of the more technologically advanced economies exploring digital currency adoption, and its policy decisions could have broader implications for how central banks integrate digital assets into national payment systems.
