BOK Governor Shin Centers Strategy on CBDC; Rate Holds 2.50%

Bank of Korea Governor Shin Hyun-song opened his four-year term by putting a central bank digital currency and tokenized bank deposits at the center of the bank’s digital strategy and keeping the policy rate at 2.50 percent.

In his inaugural address, Shin outlined a CBDC-centered roadmap and highlighted domestic tests such as Project Hangang, which explores real-world uses for digital currency. He said the central bank will join international initiatives including Project Agora to expand the Korean won’s role in cross-border payments.

The central bank left its policy rate unchanged at 2.50 percent at its latest meeting, the seventh consecutive hold. Officials cited persistent inflation risks, sluggish economic growth and heightened regional tensions after late-February strikes on Iran as reasons for maintaining current borrowing costs.

In the speech, Shin declared, “Central Bank Digital Currency and commercial bank deposit tokens issued based on it must become the center of the digital currency ecosystem.” He also warned that existing frameworks may not be sufficient to identify and respond to new financial risks and called for greater use of market price movements as an early-warning tool.

Before his appointment, Shin had expressed conditional support for private stablecoins, saying they could complement official bank tokens if they preserved trust in the currency. He did not explicitly endorse Korean won–pegged stablecoins in his inaugural remarks.

South Korean lawmakers and the executive branch are advancing a Digital Asset Basic Act to regulate domestic stablecoins. A fully regulated won-pegged stablecoin called KRW1 launched in February through a partnership between BDACS and Woori Bank. Lawmakers remain divided: a Democratic Party proposal would ban interest payments on stablecoin balances, while an opposition draft left interest rules unspecified.

Shin urged a cautious approach to new digital instruments and asked the central bank to assess interactions and risks between official and private digital tokens. He said the Bank of Korea will work with market participants and international partners to link tokenized bank deposits with a future CBDC framework.

Officials presented the CBDC effort as part of a broader plan to modernize payment rails and settlement systems while maintaining public trust in money and payments. Shin pledged a measured stance on interest rates and a careful rollout of digital currency initiatives, with coordination on cross-border payment projects to enhance the won’s utility beyond South Korea’s borders.