South Korea's BOK Nominee Backs Won Stablecoins, With Conditions
Shin Hyun-song, nominated to lead the Bank of Korea, said in written remarks submitted to the National Assembly on April 14 that won-denominated stablecoins have a legitimate place in the future monetary system. His endorsement comes with a firm caveat: banks must lead any issuance, and tight regulation is non-negotiable.
Shin submitted written remarks to South Korea's National Assembly ahead of his confirmation hearing, scheduled for April 16. In those remarks, he described won-pegged stablecoins as capable of serving a meaningful function in trading tokenized assets and enabling programmable payment features. President Lee Jae-myung nominated Shin on March 22 to replace outgoing Bank of Korea Governor Rhee Chang-yong, whose term ends April 20. Shin currently serves as Economic Adviser and Head of the Monetary and Economic Department at the Bank for International Settlements, a role he has held since 2014. He had been scheduled to retire from that position in August 2026, with French economist Hélène Rey set to succeed him there; his nomination to lead the BOK brings that transition forward ahead of schedule.
A Shift in Tone From a Prominent Skeptic
The statement carries extra weight given Shin's history. In 2022, he dismissed the case for stablecoins outright, asking why they were needed when central bank money already existed. His current position is more open, though far from a blank endorsement. He described stablecoins as something that "will be able to coexist with deposit tokens both complementarily and competitively," while insisting that South Korea's digital money framework should center on a central bank digital currency (CBDC) and commercial bank deposit tokens first.
He also flagged capital controls as a practical obstacle. Blockchain networks, he noted, may not handle South Korea's capital flow requirements efficiently. That concern is not theoretical: stablecoin balances on South Korea's top five crypto exchanges fell roughly 55 percent between July 2025 and March 2026, dropping from approximately $575 million to $188 million, according to data from Allium Labs cited by CoinDesk. The won weakened past 1,500 per US dollar in mid-March 2026, a level not seen since the 2008 financial crisis. Analysts at AMBCrypto have warned that a freely usable KRW stablecoin could accelerate capital outflows if not carefully managed, as traders may use it as a vehicle to move money out of the country. The decline in exchange balances, however, also reflects significant domestic equity market rotation: the KOSPI rose approximately 75 percent in 2025 and a further roughly 37 percent in early 2026, drawing many Korean traders out of crypto and into equities rather than out of the country altogether.
A Regulatory Standoff Still Unresolved
Shin's remarks arrive in the middle of a legislative dispute over who gets to issue these tokens. South Korea's Digital Asset Basic Act, a comprehensive framework covering stablecoin licensing, reserve requirements, and exchange regulation, has been stalled for months. The ruling Democratic Party formally introduced the bill in early April 2026, after it missed a December 2025 deadline.
The core disagreement: the Bank of Korea has pushed for a rule requiring that only entities with majority bank ownership (above 51 percent) be permitted to issue KRW stablecoins. The Financial Services Commission has resisted that restriction, arguing it would shut out fintech companies and stifle competition. Kakao and Naver, two of South Korea's largest technology platforms, are reportedly eyeing the stablecoin market; KakaoTalk alone counts approximately 50 million users, underscoring the scale of what is at stake if non-bank issuance is permitted or foreclosed. Analysts have also cautioned that a bank-controlled, tightly regulated KRW stablecoin may function more like digital bank money than a crypto-native instrument, limiting its competitiveness against USDT and USDC in global decentralized finance contexts.
The proposed bill does require issuers to hold reserves exceeding 100 percent of circulating supply, held separately at banks or approved custodians.
Outgoing Governor Rhee articulated the central bank's cautious stance plainly, as reported by Ledger Insights: "So we want to have a more conservative approach. We want to allow the Korean won stablecoin issuance, but let's start with the bank-led institutions," while acknowledging that "the market cries that the non-bank has to be allowed."
On-Chain Reality: Still Nascent
Despite the policy momentum, the on-chain KRW stablecoin market remains tiny. The most active existing token is KRWQ, co-developed by IQ and Frax on Coinbase's Base network and launched in October 2025. As of April 14, its market capitalization stood at approximately $1.34 million, with a 24-hour trading volume of around $6,657, according to CoinGecko. A second token, KRW1, launched on Avalanche in September 2025. Neither is available to South Korean residents under current rules, and both occupy a legal grey zone for Korean-resident users even as they remain accessible to non-Korean users globally. South Koreans purchased roughly $64 billion worth of stablecoins in the 12 months to June 2025, according to StablecoinInsider, underlining how much of that demand is currently flowing to foreign issuers.
Regional Stakes
For workers sending remittances from South Korea to Bangladesh, Nepal, the Philippines, Vietnam, Sri Lanka, and Indonesia, a regulated KRW stablecoin settlement layer would represent a real improvement over existing transfer channels.
South Korea hosts more than two million foreign residents and migrant workers. KRWQ has positioned itself as a cross-border settlement tool, according to the IQ Blog, though its current liquidity makes large-scale remittance use impractical.
Japan is pursuing a parallel track: the Financial Services Agency approved a yen stablecoin pilot involving Mitsubishi UFJ, Sumitomo Mitsui, and Mizuho Bank. Yen stablecoin volumes are forecast to grow fivefold by end-2026, according to DL News. Notably, broader Asian stablecoin transaction volumes rose over this same period even as Korean domestic exchange balances declined, suggesting that regional demand is expanding while South Korea's domestic market has rotated rather than retreated. Both countries frame their efforts partly as a response to the dominance of USDT and USDC across Asian markets.
What Comes Next
Shin's confirmation hearing on April 16 is the immediate event to watch. If confirmed, he will inherit both Project Hangang (the BOK's CBDC pilot, now in Phase 2 with nine participating commercial banks including KB Kookmin, Shinhan, and Woori, and live government subsidy disbursements) and the unresolved Digital Asset Basic Act. Broader trials across all nine banks are planned for the second half of 2026. Until the legislation passes and licensing is complete, no compliant KRW stablecoin will exist for South Korean residents, regardless of what the next central bank governor supports.