South Korea's newly inaugurated Bank of Korea (BOK) Governor Shin Hyun-song used his first policy address on April 21 to center the nation's digital money strategy on a central bank digital currency (CBDC) and bank-issued deposit tokens — while omitting any reference to stablecoins. The speech ma...
South Korea's newly inaugurated Bank of Korea (BOK) Governor Shin Hyun-song used his first policy address on April 21 to center the nation's digital money strategy on a central bank digital currency (CBDC) and bank-issued deposit tokens — while omitting any reference to stablecoins. The speech marks a policy pivot from the governor's own confirmation hearing one week earlier, where he endorsed a "supplementary and competitive" role for private stablecoins.
The omission lands in the middle of a six-way corporate race to issue won-pegged stablecoins. Toss, KakaoBank, Samsung-linked Woori Financial, and an eight-bank consortium are all building stablecoin infrastructure for a market that analysts at Seoulz estimate could reach 20 trillion won ($14.5 billion) within three years. Meanwhile, the BOK's Project Hangang CBDC pilot — now in Phase 2 with nine commercial banks and up to 100,000 participants — is processing real government subsidy payments through deposit tokens settled on a wholesale CBDC layer.
The result is a policy collision between central bank orthodoxy and fintech ambition inside the world's most cashless major economy, where three digital wallets alone serve 81.5 million monthly active users against a population of 51.7 million. How Korea resolves the tension — bank-controlled deposit tokens, private stablecoins, or both — will set a template that central banks from Tokyo to Frankfurt are watching.
Shin Hyun-song began his four-year term on April 21, 2026. His inaugural address outlined a bank-led digital money architecture: the BOK would issue a wholesale CBDC, while commercial banks would provide deposit tokens fully convertible into it. Stablecoins — the dominant narrative in U.S. and European digital asset policy — received no mention.
This represents a measurable shift. At his National Assembly confirmation hearing on April 14, Shin told lawmakers stablecoins could coexist with CBDCs and deposit tokens in a "supplementary and competitive" manner. During his tenure at the Bank for International Settlements (BIS), Shin had argued that private stablecoins create fragmentation across payment systems because different issuers cannot guarantee interoperability. His inaugural address suggests the BIS-era critique now guides BOK policy.
The address also committed the BOK to increased scrutiny of crypto markets and non-bank finance, and to modernizing currency infrastructure for 24-hour foreign exchange trading — a precondition for any tokenized settlement system that operates outside banking hours.
The BOK's preferred vehicle for digital money is Project Hangang, a CBDC pilot that entered Phase 2 in March 2026. The program expanded from seven to nine commercial banks with the addition of Kyongnam Bank and iM Bank. KB Financial Group, one of South Korea's largest financial conglomerates, joined the initiative in early April 2026, according to Seoul Economic Daily.
Phase 2 parameters:
The BOK describes the deposit token as "an intermediate stage between a CBDC and stablecoins." The distinction matters: deposit tokens are liabilities of commercial banks, backed by central bank reserves, while stablecoins are liabilities of private issuers backed by reserve assets (typically government bonds or bank deposits). The BOK structure keeps money creation within the regulated banking system.
Large-scale follow-up real transactions with all nine banks are planned for the second half of 2026. The stated objective includes reducing payment fees for small business owners and building financial infrastructure connected to AI-based automatic payments.
While the BOK builds its CBDC infrastructure, six distinct stablecoin initiatives are underway. None have launched; all are awaiting the Digital Asset Basic Act's regulatory framework.
1. Toss (Viva Republica): Filed 24 Korean won stablecoin trademarks in June 2025, including "TOSSKRW." At the Seoul Blockchain Meetup Conference in March 2026, Toss corporate development director Seo Chang-whoon outlined a "Money 3.0" vision built around programmable money. Toss is weighing whether to build a Layer 1 blockchain from scratch or deploy a Layer 2 on an existing chain. The fintech plans to deploy 500,000 payment terminals by late 2026 and 700,000 by 2027 — a retail distribution network no competitor can match.
2. KakaoBank: Advanced its won-pegged stablecoin project from review to active development stage, according to The Block. The bank is building smart contract FX settlement systems, token standards, and full-node operations. KakaoBank's parent ecosystem — KakaoPay (42 million registered users), KakaoBank, and KakaoTalk — gives it the largest potential distribution channel. The Kaia blockchain, created from a 2024 merger of Kakao's Klaytn and LINE's Finschia, is in talks with multiple teams about KRW stablecoin proofs of concept.
3. Samsung-Woori Financial: Woori Financial Group is integrating stablecoin settlement within Samsung Wallet, combining the country's dominant hardware ecosystem with a major banking group.
4. Eight-Bank Consortium: Eight major commercial banks are developing a shared won-pegged stablecoin. This represents the institutional banking sector's collective response to fintech competition.
5. BDACS (Blockchain Digital Asset Custody Standard): A custody and infrastructure player positioning to serve stablecoin issuers with compliant back-end systems.
6. Naver: The search and e-commerce conglomerate is leveraging its Naver Pay infrastructure (part of the 81.5 million combined MAU across Korea's three major wallets) to explore stablecoin distribution.
The competitive intensity reflects the economics at stake. South Korea is approximately 90% cashless. Three digital wallets — Kakao Pay, Naver Pay, and Toss Pay — together serve 81.52 million monthly active users. Whoever controls the won stablecoin rails controls a significant layer of the country's payment infrastructure.
The Digital Asset Basic Act, South Korea's comprehensive crypto regulatory framework, was delayed from late 2025 into 2026 due to a deadlock between two regulators. According to CoinDesk, the core dispute centers on stablecoin issuance rights:
The proposed act would replace the term "virtual assets" with "digital assets" and require stablecoin issuers to hold 100% reserves in safe assets such as bank deposits or government bonds, with full custody by banks. Minimum capital reserves are set at 5 billion won (~$3.5 million). Foreign stablecoins, including Circle's USDC, would need a licensed local branch or subsidiary to operate in South Korea.
On April 8, 2026, the FSC formally proposed the bill with bank-style rules for stablecoins, according to CoinDesk. The BOK governor's April 21 address — omitting stablecoins entirely — can be read as the central bank's opening position in the legislative negotiation.
In January 2026, Korea moved to ease ownership limits for banks to acquire stakes in won-backed stablecoin issuers, according to KED Global. This suggests a compromise path: banks could invest in fintech-built stablecoin platforms without the fintechs needing to become banks.
The policy debate unfolds against a large and active crypto market. According to Korean regulatory filings:
The FSC ended its nine-year prohibition on corporate crypto trading in early 2026, allowing approximately 3,500 listed companies and professional investment firms to re-enter the market. Tiger Research notes that while retail engagement shows signs of plateauing, institutional capital is filling the gap — making the regulatory framework for stablecoins and deposit tokens an infrastructure question, not merely a retail consumer issue.
Governor Shin's address referenced Project Hangang's connection to Project Agorá, a BIS-led initiative exploring tokenized cross-border payments. Agorá brings together seven central banks — including the BOK, Federal Reserve Bank of New York, Bank of Japan, Bank of England, Swiss National Bank, Bank of France, and Bank of Mexico — alongside 41 financial institutions.
According to Reuters, Project Agorá entered its testing phase in 2025, with a lessons-learned report expected in the first half of 2026. The initiative tests how tokenized commercial bank deposits and central bank reserves can settle wholesale cross-border payments.
For South Korea, a won-pegged deposit token interoperable with Agorá's cross-border infrastructure would give the BOK a path to international settlement that bypasses private stablecoin networks entirely. This helps explain the governor's strategic emphasis: deposit tokens, if linked to the BIS multi-central-bank architecture, could serve both domestic payments and cross-border trade settlement.
BOK Governor Shin omitted stablecoins from his inaugural April 21 address after endorsing their "supplementary" role at his April 14 confirmation hearing. The shift signals the central bank's negotiating position as the Digital Asset Basic Act enters legislative review.
Project Hangang Phase 2 is live with nine banks and up to 100,000 participants, processing real government subsidies through deposit tokens settled on a wholesale CBDC layer. This is the most advanced bank-led digital money pilot in Asia.
Six competing won stablecoin initiatives — led by Toss, KakaoBank, Samsung-Woori, an eight-bank consortium, BDACS, and Naver — are building infrastructure for a market estimated at 20 trillion won within three years. None can launch without regulatory clarity from the Digital Asset Basic Act.
The FSC-BOK dispute over issuance rights (open competition vs. 51% bank ownership) remains unresolved. The act's stablecoin provisions will determine whether Korea's digital money infrastructure is bank-controlled, fintech-driven, or hybrid.
Project Agorá's cross-border architecture gives the BOK a strategic rationale for deposit tokens over private stablecoins: interoperability with seven other central banks for international settlement.
South Korea presents the clearest test case of the CBDC-versus-stablecoin policy question. The country has the infrastructure (90% cashless), the user base (16.3 million crypto traders, 81.5 million digital wallet MAUs), and the corporate contestants (Kakao, Toss, Samsung) to support either model at scale. The BOK governor's decision to sideline stablecoins in favor of deposit tokens is not abstract monetary theory — it is a concrete policy position that will determine which institutions capture the economics of Korea's digital payment rails.
The outcome depends on the Digital Asset Basic Act. If the 51% bank ownership rule prevails, deposit tokens win and fintech stablecoin projects become subordinate to banking consortiums. If the FSC's broader eligibility framework passes, Korea could see parallel systems — a CBDC/deposit-token layer for regulated banking, and private stablecoins competing for retail and cross-border flows. The legislative timeline remains uncertain, but with Project Hangang processing real transactions and six stablecoin projects in development, the window for regulatory clarity is narrowing.