Hyun Song Shin spent 12 years at the Bank for International Settlements, shaping how central banks think about digital money. On March 22, South Korean President Lee Jae-myung nominated him to lead the Bank of Korea. He replaces outgoing Governor Lee Chang-yong when the term ends in April.
The economist who built the case for central bank-anchored digital currency must now deliver it — for a currency that is not the US dollar.
The Case Against Stablecoins
Shin studied and taught at Oxford before holding professorships at the London School of Economics and Princeton. He joined BIS in 2014 as Economic Adviser and Head of the Monetary and Economic Department.
In a March 2026 paper titled “Tokenomics and Blockchain Fragmentation,” Shin made his most detailed case yet. Public blockchains need validators to maintain consensus. More decentralization means higher validator rewards, paid by users through gas fees. When fees spike, users flee to cheaper chains. Fragmentation follows.
Stablecoins inherit this problem directly. A USDC token on Ethereum and one on Solana sit on separate ledgers with no native way to communicate. Moving between chains requires bridges that add cost, delay, and hacking risk. The result, Shin argues, is not a single monetary network but a collection of chain-specific silos.
This breaks what Shin calls the singleness of money. In traditional finance, central banks guarantee par conversion across institutions. No such anchor exists on decentralized rails. His solution: a unified ledger in which central bank money, deposits, and tokenized assets coexist on a single programmable platform.
From Theorist to Central Banker
At BIS, Shin could analyze and recommend. The audience was every central bank. The stakes were theoretical.
As BOK governor, everything changes. South Korea does not issue a reserve currency. The US is institutionalizing dollar stablecoins through the GENIUS Act, framing them as tools to extend dollar dominance. For reserve currency nations, absorbing private stablecoin innovation reinforces sovereignty. For non-reserve currency nations, it can erode sovereignty.
Shin cannot block dollar stablecoins — and he knows it. In a 2018 meeting with Kim Yong-beom, then vice chairman of the Financial Services Commission and now presidential chief of staff for policy, Shin said that cross-border crypto trades and outright bans would fail. He advised that banks — the channel through which fiat liquidity flows into crypto — were the most effective control point. Kim recounted this in his 2022 book.
That logic points to a two-track approach. Use the banking system as a gatekeeper to manage dollar stablecoin flows. At the same time, build a competitive domestic alternative. The BOK launched phase two of its CBDC project “Hangang” on March 18, with the central bank issuing digital currency and commercial banks distributing deposit tokens. The architecture maps onto Shin’s unified ledger concept. Together, the two tracks aim to keep the Korean won relevant in a landscape where dollar-denominated digital money is becoming the default infrastructure.
Can the Theory Survive Practice?
South Korea hosts one of the world’s largest crypto markets. If Shin’s two-track approach works, it will serve as a reference case for every non-dollar economy facing the same pressure.
Critics note real obstacles — and an alternative path. Some argue that South Korea should allow the private issuance of Korean-won stablecoins rather than rely on a CBDC that may arrive too late. A regulated won stablecoin could compete directly with dollar stablecoins on speed and accessibility, without waiting for the central bank to finish building its platform.
A unified ledger also concentrates risk. If a single platform holds central bank money, deposits, and tokenized assets, a single failure could paralyze the entire financial system. The resilience that comes from distributed infrastructure — ironically, the very fragmentation Shin criticizes — would be lost.
Governance is another unsolved problem. Projects like BIS’s Agora, which involves seven central banks and 43 financial institutions, show that agreeing on who controls shared infrastructure is harder than building it. Meanwhile, global stablecoin supply already tops $315 billion. Bridging protocols like Circle’s CCTP are patching cross-chain fragmentation from the private side. The market is not waiting.
Shin authored the theory. He now owns the outcome.
