*The author is a visiting research fellow at the Korea Capital Market Institute and former assistant governor of the Bank of Korea.*
When multiple currencies circulate within a single economic zone without being exchanged at par, problems arise. Economic agents suffer the burden of calculating exchange ratios for every transaction. So why does 10,000 won deposited at Bank A have the same value as 10,000 won at Bank B? Financial experts explain this through the concept of "singleness of money" — the property that maintains a 1:1 value regardless of the issuer or form. This works thanks to institutional safeguards such as deposit protection and prudential regulations, combined with a robust network of central bank currency, reserve requirements, and payment settlement systems that finalize interbank transactions.
Stablecoins, however, face a fundamental limitation in securing this monetary singleness. Even the same "Tether (USDT)" behaves differently depending on whether it runs on Ethereum or Tron. Values vary slightly based on the issuing chain's environment, and the coins are not interoperable. Shin Hyun-song, nominee for Bank of Korea governor, identified in a recent paper that mining mechanisms and congestion — inherent properties of public blockchains — are the root causes. This leads to "fragmentation," where identical coins fail to trade at par. Technical attempts to solve this continue, but challenges of time delays, fees, and security vulnerabilities remain.
As an alternative to overcome these limitations, we should focus on "Project Hangang." On the "Hangang Platform," the wholesale central bank digital currency issued by the Bank of Korea serves as the central pillar for maintaining monetary singleness. Commercial banks issue "deposit tokens" — functionally similar to stablecoins — as everyday payment instruments. The principle is the same as when we transfer funds through banking apps today. The concept is for the central bank to guarantee deposit token values while allowing safe access to blockchain benefits such as programmability. This aligns with the "unified ledger" concept proposed by nominee Shin.
Some criticize deposit tokens as being limited to domestic use and less scalable than stablecoins. However, the Hangang Platform already aims for global standards. Currently, the Agora project — a blockchain-based initiative to improve cross-border remittances — is underway, led by the Bank for International Settlements (BIS) and the Institute of International Finance (IIF). Central banks from seven countries including Korea, the United States, the European Union, the United Kingdom, and Japan, along with some 40 major global banks, are participating. If the Hangang Platform links with the Agora Platform, the use of deposit tokens will naturally expand to the global arena.
Furthermore, the Hangang Platform can play a role in ensuring stablecoin stability. The scenario involves the Hangang Platform supporting real-time 1:1 exchanges between stablecoins and deposit tokens. This would allow users to enjoy stablecoin innovation while securing stability equivalent to the existing monetary system. The Hangang Platform provides stablecoins with a safe return path, while stablecoins cover niche areas that deposit tokens cannot reach — a mutually complementary structure.
Technological progress must not undermine the essential functions of money. The benefits of blockchain should operate on the stable foundation of a "single currency." Project Hangang represents the central bank's policy response to preserving monetary singleness and financial stability in the digital economy era. Through this, I hope Korea will lead global digital finance infrastructure and lay the groundwork for a future monetary ecosystem where innovation and stability harmonize.