Key Takeaways:
- Bank of Korea (BOK) Governor Shin Hyun-song, sworn in on April 21, 2026, made CBDC and deposit tokens the centerpiece of his inaugural address.
- Project Hangang Phase 2, now involving 9 banks, targets government subsidy use cases worth up to 110 trillion won ($73B).
- Shin’s omission of stablecoins from his first speech signals a state-first digital won strategy as South Korea finalizes its Digital Asset Basic Act.
Project Hangang Phase 2 Takes Center Stage as New BOK Governor Outlines Digital Won Plans
Shin took office, succeeding Rhee Chang-yong at the start of a four-year term. His first major policy speech made no mention of won-denominated stablecoins, a notable omission given that South Korea is actively debating stablecoin rules under the pending Digital Asset Basic Act.
The BOK’s position, as Shin framed it, centers on a two-tier model. The central bank issues a wholesale or hybrid CBDC. Commercial banks issue deposit tokens that are fully convertible and designed for everyday payments and settlements. Neither layer leaves room for a privately issued alternative at the top of the stack.
Shin pointed directly to Phase 2 of Project Hangang, the BOK’s flagship digital won pilot, as the mechanism to “increase the usability of CBDC and deposit tokens.” Phase 2 launched in March 2026 and has since expanded to nine major commercial banks. Real-world transaction testing is underway, with potential applications including government subsidy disbursements valued at up to 110 trillion won, approximately $73 billion.
Phase 1 of Project Hangang focused on technical testing of a blockchain-based digital won. Phase 2 moves into applied use, exploring programmable money, regulatory compliance tools, and integration with existing payment infrastructure.
Shin also referenced BOK’s participation in Project Agora, a BIS-led cross-border tokenization initiative. The project explores multi- CBDC platforms for faster international payments and settlements. For Shin, BOK involvement in Agora ties directly to a stated goal of expanding the Korean won’s role in global digital payments without loosening capital controls or destabilizing the financial system.
Additional priorities in the speech included 24-hour foreign exchange trading, an offshore won settlement system, and tighter oversight of crypto markets and non-bank financial institutions. Shin said the BOK would pursue “cautious and flexible” monetary policy throughout his term.
The stablecoin omission drew immediate attention from observers. During his mid-April confirmation hearing before parliament, Shin had taken a more open position. In written remarks submitted to lawmakers, he stated that CBDCs and deposit tokens would “coexist with stablecoins in a manner that is supplementary and competitive to each other,” and that any stablecoin issuance should begin with regulated banks. The shift in tone from nominee to governor was deliberate, according to observers watching the process.
Shin brings a specific international background to the role. He served as Economic Adviser and later Head of the Monetary and Economic Department at the Bank for International Settlements from 2014 until early 2026. Before the BIS, he held academic posts, including a position at Princeton University. His tenure at the BIS overlapped with several collaborative CBDC experiments, including earlier joint projects involving South Korea.
The commercial banking sector stands to gain significant positioning under Shin’s framework. Deposit tokens place commercial banks at the center of digital money distribution, giving them a direct role in programmable finance while keeping central bank oversight intact.
Crypto markets and non-bank financial entities face increased scrutiny under the new governor. Shin pledged better data access for risk tracking and closer monitoring of activity outside the traditional banking system.
South Korea’s CBDC development has progressed through two governors. Rhee Chang-yong advanced technical pilots and explored subsidy applications. Shin takes over at the commercialization phase, with a clear preference for regulated, interoperable infrastructure over broader private-sector experimentation.
