[Editorial] Shin Hyunsong Named BIS Chair: Time to Show the Strength of Korea's Digital Currency Model

Shin Hyunsong, Governor of the Bank of Korea. Photo by Kim Hyunmin

Shin Hyunsong, Governor of the Bank of Korea, has been appointed chair of the Bank for International Settlements' (BIS) Committee on Payments and Market Infrastructures (CPMI). He is the first central bank governor from outside the United States and Europe to hold the position. The CPMI, which includes 28 central banks, sets international standards for payments and financial market infrastructures. Governor Shin is a renowned economist who has served as an economic adviser to the BIS and as head of its Monetary and Economic Department. His international standing and expertise in digital currencies and next-generation payment systems were behind his appointment.

Alongside Governor Shin's personal capabilities, the Bank of Korea's leading research and hands-on experience in the digital currency field should also be recognized. The Bank is conducting Project Hangang, which tests central bank digital currencies (CBDCs) in real-world settings. It completed the first phase last year, in 2025, and has now expanded the project to a second phase.

The Bank of Korea supplies wholesale digital currency to banks, which issue deposit tokens to their customers. Individuals make transactions using deposit tokens, while final settlement between banks takes place through the central bank. This approach brings the current monetary system, in which central bank base money and commercial bank deposit money operate together, into the digital environment.

If individuals directly hold CBDCs on a large scale, bank deposits could flow out, reducing the funds available for lending. By contrast, the strength of the Korean model is that it improves the convenience of digital payments while preserving banks' funding and credit-supply functions.

Developments in China are also worth noting. Initially, the digital yuan followed a cash-like model in which banks and other institutions handled distribution, while individuals held currency issued by the central bank. In January 2026, China switched to a system that classifies digital yuan held in commercial bank wallets as bank deposit liabilities and applies interest payments and deposit insurance. This is similar to the Bank of Korea's design.

This appointment should be used as an opportunity to promote the strengths of the Korean model internationally. We hope that combining Governor Shin's international capabilities with the Bank of Korea's experience will lead to the creation of a safe and efficient future payment and settlement system.

This content was produced with the assistance of AI translation services.