Bank of Korea chief meets 16 bank heads to discuss household debt, stablecoins

Bank of Korea Governor Shin Hyun-song met with commercial bank chiefs for the first time since taking office Monday, discussing household debt risks and stablecoins among other pressing issues.

Shin attended a dinner meeting with bank heads at the Korea Federation of Banks building in Jung-gu, Seoul. Korea Federation of Banks Chairman Cho Yong-byung and the heads of 16 banks were present.

Household debt risk management was among the topics discussed at the meeting, according to sources familiar with the matter.

Shin had flagged household debt as a key risk at a press briefing held on the sidelines of the Jackson Hole Economic Policy Symposium in Wyoming last month, saying housing prices were rising at a double-digit pace and household debt was also growing. He called for preemptive action on financial stability, warning that broad liquidity and market-based funding could increase.

Stablecoins also featured on the agenda. Shin has consistently called for the swift introduction of a won-denominated stablecoin regime. At a plenary session of the National Assembly's Finance and Economy Planning Committee in July, he said stablecoins and deposit tokens would "continue to sustain the monetary ecosystem in a competitive and complementary relationship." Separately, the Bank of Korea is pursuing the second phase of "Project Han River," a real-transaction test of deposit tokens based on its CBDC.

Speaking to reporters after the meeting, Shin said the participants "talked about this and that regarding current issues," adding that "there was a wide-ranging conversation and we heard a lot from the field."

The bank chiefs held a regular board meeting earlier that day before sitting down with Shin. However, the agenda covered only routine matters such as budget review and revisions to best-practice guidelines, with no separate discussion on the selection of the next Korea Federation of Banks chairman, sources said. The federation is expected to begin the process of choosing its next chairman as early as next month.