Shin Hyun-song's former organization BIS: "Stablecoins, difficult to be a core pillar of the currency ecosystem"

Shin Hyun-song, nominee for Governor of the Bank of Korea

Regarding Shin Hyun-song, nominee for Governor of the Bank of Korea, taking a progressive stance on stablecoins, the Bank for International Settlements (BIS), where he worked for 12 years, expressed a differing view.

In response to a Yonhap News query regarding Shin's statement on the 20th that 'stablecoins can be used complementarily and competitively with deposit tokens', BIS replied, "Stablecoins do not meet the requirements to become a mainstay of the monetary system when compared to the three key criteria of unity, elasticity, and integrity."

BIS added that while it "does not discuss individual national policies," it was reiterating its existing stance at a fundamental level.

This is interpreted as a position with a somewhat different tone from Shin's remarks at the National Assembly's confirmation hearing on the 15th.

Shin stated at the time, "It is true that I was negative about stablecoins and virtual assets in the past," adding, "I have also established a theoretical framework to some extent."

He continued, "However, in a position leading the central bank, one must consider how to develop the ecosystem in a complementary way by gathering opinions from various stakeholders rather than just one's own."

He also stated, "I have thus clarified my position."

Shin's new stance is a significant retreat from the rigid position of BIS, which he spearheaded in establishing, and largely aligns with the Bank of Korea's adapted stance to suit domestic circumstances.

Regarding this topic, the Bank of Korea, which has been influenced by BIS, initially argued that CBDC-based deposit tokens could replace stablecoins, but later backed down, advocating that only bank-centric stablecoins should be permitted first.

However, as political discussions continued to lean towards making it difficult to block non-bank entry, the Bank of Korea conceded once more by proposing measures to supplement the system at the issuance approval stage.

In this regard, Governor Rhee Chang-yong also mentioned in an interview with a foreign media outlet last July, "it is necessary to recalibrate our plans."

It is interpreted that Shin, too, aligned with the Bank of Korea's existing stance less than a month after retiring from BIS and returning to Korea.

The introduction of Won-based stablecoins was a presidential campaign pledge by Lee Jae-myung, and the ruling party, which was pushing for related legislation, welcomed Shin's change of stance.

In particular, the Democratic Party of Korea's Digital Asset Task Force (TF) accelerated efforts, proposing to prioritize tabling the bill to the National Assembly's Political Affairs Committee's legislative subcommittee to begin discussions without waiting for the government's proposal.

As a result, stablecoin-related stocks surged one after another.

The divergence between Shin and his 'alma mater' BIS regarding digital assets is expected to become more pronounced.

BIS informed Yonhap News that "Pablo Hernández de Cos, General Manager of BIS, is scheduled to give a speech at the Bank of Japan today (20th), and stablecoins will also be covered."