International Finance Expert and 'Pragmatic Hawk' Likely to Speed Up BOK’s Digital Currency Push

President Lee Jae Myung’s decision to nominate Hyun-Song Shin, head of the Monetary and Economic Department of the Bank for International Settlements (BIS), as the next governor of the Bank of Korea (BOK) reflects the assessment that he is the right person to achieve both price stability and financial stability amid complex economic pressures such as low growth, high household debt, and a surging exchange rate.
Coming from the Bank for International Settlements (BIS), Shin is an expert who has closely analyzed financial cycles and the buildup of risks. He also has extensive experience in research on Central Bank Digital Currency (CBDC), making him widely seen as well suited to lead both the BOK’s policy response and its innovation agenda.
■ A pragmatic hawk and financial stability strategist
At a briefing on the 22nd, Kyuyoun Lee, senior presidential secretary for public communication at Cheong Wa Dae, the Blue House, described Shin as "the right person to achieve the dual goals of price stability and growth at a time when international economic uncertainty has increased due to the situation in the Middle East." Lee went on to say, "He is a rare figure who has experience in international organizations, academia, and the policy field," adding, "In a situation where we can no longer separate the domestic and global economies, his expertise will shine even more," expressing high expectations.
The Korean economy is struggling to find clear drivers for a rebound in either growth or prices. Growth is stuck around 2%, and although headline inflation has slowed to the 2% range, households still feel prices are high. On top of this, the won–dollar exchange rate is threatening to break above 1,500 won, with volatility remaining elevated. A rising exchange rate pushes up import prices and increases pressure on foreign capital outflows, adding to the burden on monetary policy.
If the Federal Reserve System (Fed) maintains its high interest rate stance for an extended period, a wider interest rate gap between Korea and the United States will be unavoidable. In that case, rate cuts would intensify upward pressure on the exchange rate, while holding rates steady could increase downward pressure on growth, creating a policy conflict. Household debt remains the biggest domestic risk. With household debt exceeding 100% of gross domestic product (GDP), sensitivity to interest rate changes is very high. Cutting rates could fuel the real estate market and credit expansion, while keeping rates unchanged would quickly increase the repayment burden on vulnerable borrowers. This is why striking a balance between supporting the economy and safeguarding financial stability has emerged as a core task.
This environment has drawn attention to Shin’s policy orientation as a BIS veteran. The BIS has long identified abundant global liquidity and rising leverage as key causes of financial crises. Shin is known for his strong vigilance toward financial cycles and the accumulation of risks. As a result, many observers expect that instead of straightforward rate cuts, he is more likely to pursue a "gradual and calibrated easing" approach that takes household debt, the exchange rate, and financial market stability into account at the same time.
Recent interviews suggest that Shin is a pragmatic hawk. He has supported preemptive interest rate hikes in response to inflation and has emphasized an approach to monetary policy that considers both the financial cycle and overall financial conditions.
■ Expert on CBDC and stablecoins
Given that Shin has led CBDC research at the BIS, the BOK’s "Project Han-gang" is expected to gain momentum. Under the current design, the CBDC system would have the BOK issue a wholesale digital currency, which commercial banks would then use as the basis for issuing deposit tokens that reach retail users.
Moreover, Shin has assessed stablecoins by saying that "it is difficult for them to maintain their essential value of 'singleness' in times of crisis," signaling a negative stance toward monetary arrangements that escape central bank control. For this reason, he is seen as likely to oppose private issuance by fintech firms and others, and related policy directions may shift.
Professor Hyun Jeong-hwan of the Department of International Trade at Dongguk University, who previously worked at the BOK, commented, "Because he has studied and handled CBDC more than almost anyone else, the BOK will be able to reduce trial and error as it pushes ahead with its policies," adding, "His appointment would also provide a bridge for Korea to play a leading role within the BIS, where central banks from around the world gather."
The environment facing the Bank of Korea (BOK) is anything but simple. The bank must find a policy balance under multiple constraints: low growth of around 2%, household debt exceeding 100% of GDP, and an exchange rate hovering near the 1,500-won level.
Discussing the tasks awaiting the next BOK governor, Professor Hyun Jeong-hwan said, "There are many external factors that we cannot control, but taking them into account, we need a solid exchange rate policy, a stronger foreign exchange safety net, and well-prepared domestic monetary policy tools."


taeil0808@fnnews.com Kim Tae-il Reporter