South Korea’s new Bank of Korea Governor Shin Hyun-song has made his position clear: the future of digital money in the country will be led by the central bank and commercial banks, not by privately issued stablecoins. In his inaugural policy speech on April 21, Shin placed central bank digital currency (CBDC) and bank-issued deposit tokens at the center of South Korea’s monetary modernization strategy, sending a strong signal as lawmakers continue work on the country’s Digital Asset Basic Act.
A state-led digital won framework comes into focus
Shin formally began his four-year term on April 21, succeeding Rhee Chang-yong. In his first major address, he did not mention won-denominated stablecoins at all. That omission drew immediate attention because South Korea is actively debating how stablecoins should be treated under its emerging digital asset regulatory structure.
The framework outlined by Shin is built on a two-tier model. Under this structure, the Bank of Korea would issue a wholesale or hybrid CBDC, while commercial banks would issue deposit tokens that remain fully convertible and are designed for ordinary payments and settlement activity. In practical terms, the model preserves central bank oversight at the top layer while giving regulated banks a major distribution role in the retail digital money ecosystem.
The speech suggested that privately issued stablecoins are not the preferred anchor of South Korea’s digital currency stack. Instead, the Bank of Korea appears to be pushing for an interoperable and regulated architecture in which digital won infrastructure develops under official supervision.
Project Hangang moves from testing to real-world use
The clearest expression of that strategy is Project Hangang, the Bank of Korea’s flagship digital won pilot. Shin highlighted Phase 2 of the project as a key mechanism for increasing the usability of both CBDC and deposit tokens.
Phase 2 launched in March 2026 and has now expanded to nine major commercial banks. Unlike the first phase, which focused mainly on technical testing of a blockchain-based digital won, the current phase is aimed at practical deployment scenarios. According to the reported scope, live transaction testing is already underway, with one of the major use cases tied to government subsidy disbursements valued at up to 110 trillion won, or roughly $73 billion.
This marks a significant shift from proof-of-concept work to applied experimentation. The second phase is exploring programmable money functions, compliance mechanisms, and integration with South Korea’s existing payments infrastructure. That transition matters because it shows the central bank is no longer treating digital won development as a purely technical exercise. The emphasis is now on how regulated digital money can operate inside the real economy.
Commercial banks stand to play a central role
One of the biggest implications of Shin’s approach is the positioning of commercial banks. Deposit tokens place banks at the center of digital money issuance for everyday use, while the Bank of Korea retains control over the core monetary layer through CBDC issuance. This arrangement gives commercial banks a pathway into programmable finance without removing the central bank from the governance structure.
That balance may prove politically and institutionally important. It offers modernization without handing top-level monetary influence to private issuers outside the traditional banking system. It also aligns with a broader policy tendency in South Korea to favor regulated financial institutions over open-ended private experimentation when systemic payment functions are involved.
Cross-border ambitions remain part of the agenda
Shin also pointed to the Bank of Korea’s participation in Project Agora, a cross-border tokenization initiative led by the Bank for International Settlements (BIS). The project is designed to explore multi-CBDC platforms that could improve the speed and efficiency of international payments and settlement.
For South Korea, involvement in such efforts is tied to a larger ambition: increasing the role of the won in global digital payments. At the same time, the central bank does not appear willing to sacrifice financial stability or loosen capital controls in pursuit of that goal. Shin’s framing suggested that innovation in cross-border payments must remain compatible with the country’s broader macro-financial safeguards.
This fits his wider policy agenda, which also includes support for 24-hour foreign exchange trading, development of an offshore won settlement system, and stronger oversight of crypto markets and non-bank financial institutions.
Stablecoin silence signals a policy preference
The most widely discussed aspect of Shin’s speech was not just what he said, but what he left unsaid. During his parliamentary confirmation hearing in mid-April, he had taken a noticeably more open stance. In written remarks submitted to lawmakers, Shin said that CBDCs and deposit tokens could coexist with stablecoins in a relationship that is both supplementary and competitive. He also suggested that if stablecoin issuance were to be allowed, it should begin with regulated banks.
By contrast, his first policy speech as governor omitted stablecoins entirely. Observers interpreted that shift in tone as deliberate. At a minimum, it indicates that once in office, Shin chose to foreground the central bank-and-bank model rather than publicly emphasize coexistence with private stablecoin alternatives.
The timing is especially important because South Korea is still refining its legal and regulatory framework for digital assets. In that environment, public signaling from the central bank can shape market expectations, bank strategy, and the broader policy debate over who should be trusted to issue digital money tied to the won.
A governor with deep BIS experience
Shin brings substantial international policy experience to the role. From 2014 until early 2026, he served at the BIS, first as Economic Adviser and later as Head of the Monetary and Economic Department. Before that, he held academic posts including a position at Princeton University. His years at the BIS overlapped with multiple collaborative CBDC experiments, including projects involving South Korea.
That background helps explain why his framework emphasizes institutional design, interoperability, and regulated deployment rather than rapid liberalization. It also suggests that South Korea’s digital won policy may continue to reflect lessons drawn from global central bank cooperation and multilateral experimentation.
Tighter supervision for crypto and non-bank finance
Beyond digital currency infrastructure, Shin used the speech to stress stronger monitoring of crypto markets and non-bank financial activity. He said the Bank of Korea would seek better access to data for risk tracking and closer oversight of activity outside the traditional banking system.
This matters because South Korea remains one of the world’s most active retail crypto markets. More intensive monitoring does not necessarily imply immediate new restrictions, but it does indicate that the central bank views digital asset activity as relevant to broader financial stability surveillance.
In policy terms, that means South Korea’s digital finance agenda is evolving on two tracks at once: building official digital money infrastructure while tightening visibility over risks arising from private-sector crypto and shadow-financial activity.
What the speech means for South Korea’s digital asset path
The Bank of Korea’s CBDC work has now advanced through two governors. Under Rhee Chang-yong, the central bank pushed technical pilots and explored potential use cases such as public subsidy distribution. Under Shin, the project appears to be entering a commercialization-oriented phase with a clearer institutional preference.
The message from the inaugural speech is straightforward. South Korea is not rejecting innovation in digital money, but it is signaling that the preferred route will be regulated, bank-centered, and centrally supervised. CBDC and deposit tokens are being framed as the foundation of the digital won ecosystem, while stablecoins remain peripheral to the official vision for now.
As the Digital Asset Basic Act continues to take shape, Shin’s remarks may become a reference point for how lawmakers, regulators, and market participants interpret the balance between state-backed digital currency infrastructure and private digital asset innovation in South Korea.