The Bank of Korea will leave stablecoin operations to private companies while retaining a role in protecting monetary and payment stability. Governor Hyun Song Shin set out that position during a National Assembly audit in Seoul on October 12. The central bank also plans to use its own digital currency, rather than stablecoins, to settle tokenized government bonds in a 2027 pilot.
Why the Bank of Korea Will Not Operate Stablecoins
Responding to lawmaker Lee Jun-seok, Shin said, “It is right for stablecoins to be handled by the private sector.” He explained that stablecoins are designed to circulate on open blockchain networks independently of central bank money. The Bank of Korea would instead provide input on issues affecting the wider monetary system.
However, his remarks did not authorize unrestricted stablecoin issuance. The central bank previously supported bank-led groups during the initial introduction of won-backed stablecoins, citing financial safeguards. Shin did not withdraw that position or announce new licensing rules.
Project Hangang Keeps Commercial Banks in Charge
Shin also separated private stablecoins from Project Hangang, which combines institutional central bank digital currency with deposit tokens issued by commercial banks. The central bank settles transactions between banks, while lenders manage customer deposits and personal information. Shin rejected concerns that the project would allow the central bank to monitor individuals’ transactions.
He added that the Bank of Korea has not considered introducing a general-purpose retail CBDC since 2023. In an October 8 official explanation, the bank described preparations for further consumer payment tests in 2026. Project Hangang’s next phase will expand participation from seven to nine banks and increase eligible users from 100,000 to 500,000.
Wholesale CBDC Chosen for 2027 Treasury Pilot
For its 2027 government bond pilot, the Bank of Korea plans to settle tokenized Treasury transactions using wholesale CBDC rather than private stablecoins. Materials submitted to lawmakers said central bank-issued money would connect bond transfers with payments, reducing the risk of failed settlement. The project will test government bonds represented as blockchain-based digital assets.
The bank established an asset tokenization team in August and has discussed the pilot with the Ministry of Economy and Finance. Separately, Project Hangang plans to test 30 billion won in electric-vehicle charging subsidies using deposit tokens. Its 2026 budget rose 61.8% to 12.52 billion won, although the connection between the two projects remains undecided.
Shin Flags Risks From Overseas Crypto Cards
During the same audit, lawmaker Kim Nam-joon questioned crypto cards that convert digital assets into conventional currency for purchases. Shin said dollar-backed stablecoin cards issued overseas carry risks involving higher fees and regulatory oversight. He also noted that an extra intermediary handles conversion before merchants receive payment.
Kim cited average daily stablecoin trading of about 200 billion won in South Korea as of July. He also referred to an overseas estimate of USD10 billion in cumulative card payments, without establishing how much came from South Korean users.
Lawmakers also questioned gaps in customs reporting and consumer protection. After questions about hacking, frozen accounts and refunds, Shin said, “We will continue to monitor closely and consult closely with relevant agencies.”
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