Shin Hyun-song, the newly appointed head of the Bank of Korea, has expressed support for central bank digital currencies (CBDCs) and tokenized deposits in his first public address.
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 initiative exploring a blockchain-based wholesale CBDC system.
He also highlighted international collaboration efforts such as the “Agora Project,” launched in April 2024 by the Bank for International Settlements and seven central banks to study tokenized cross-border payments. Shin said these initiatives could help elevate the role of the Korean won in the evolving digital payments landscape.
Despite earlier reports suggesting openness to won-backed stablecoins, Shin did not address the topic in his speech. Meanwhile, South Korea’s proposed stablecoin legislation remains stalled, with policymakers divided over whether issuance should be restricted to banks or extended to fintech and technology firms.
Geopolitical risks in focus
Shin also pointed to rising geopolitical tensions—particularly in the Middle East—and their impact on oil prices, warning that the central bank must navigate increasing uncertainty driven by global economic shifts, inflation pressures and external shocks.
“We must strive for price and financial stability through the operation of prudent and flexible monetary policy,” he said.
Shin Hyun-song previously served as an economic adviser at the Bank for International Settlements from May 2014 to March 2026, and later became head of its Monetary and Economic Department in January 2025, according to the BIS.
In an academic paper published last month, Shin argued that stablecoins fall short of a key property of money—“unity”—because blockchain ecosystems are fragmented across multiple networks with differing fees, security models and levels of decentralization.
South Korea to test tokenized deposits in public spending
Meanwhile, South Korea’s Ministry of Economy and Finance is preparing a pilot program to test blockchain-based payments for certain government expenditures under a regulatory sandbox framework.
The initiative will use tokenized deposits to carry out operational spending, with a broader rollout targeted for the fourth quarter of 2026. The first phase is set to begin in Sejong City and will include restrictions on timing and spending categories.
