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South Korea's government and the Bank of Korea plan to prepare a bill this year amending the Foreign Exchange Transactions Act to regulate stablecoins as payment instruments. The proposal would add a virtual-asset monitoring framework and follows last year's National Assembly audit. The audit called for payment infrastructure at global standards, including 8 p.m. operating hours for large-value payment systems and controls against money-laundering risks tied to global crypto exchanges.
Why it matters
Giving stablecoins express status as payment instruments would connect their domestic use to South Korea's foreign-exchange rules rather than leaving them only under broader asset regulation. That matters because crypto transactions can move value across borders outside traditional financial institutions. The Bank of Korea is also preparing international cooperation against illegal digital-asset transactions. It said mixers and unhosted wallets increase anonymity, making illicit cross-border transfers harder to trace.
Market impact
South Korea is separately developing the Digital Asset Basic Act, including exchange licensing and stablecoin issuance rules. Financial Services Commission Chairman Lee Eog-weon said discussions were nearing completion and the government aims to introduce it as soon as possible. If approved, the combined measures would give stablecoin providers a clearer compliance path and place cross-border payment activity under formal oversight. The central bank will consult ministries to minimize regulatory arbitrage if legislative gaps emerge before the wider framework takes effect.
Frequently asked questions
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How would stablecoins fit into South Korea's existing payment regime?
The bill would amend the Foreign Exchange Transactions Act to treat stablecoins as payment instruments, placing their domestic use within the country's foreign-exchange policy and virtual-asset monitoring framework.
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Why is the stablecoin proposal tied to a National Assembly audit?
The plan follows last year's audit, which called for payment infrastructure at global standards, including 8 p.m. hours for large-value payment systems and controls against money laundering linked to global crypto exchanges.
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How does South Korea plan to address cross-border crypto crime?
The Bank of Korea plans an international cooperation framework because mixers and unhosted wallets can increase anonymity and make illegal cross-border digital-asset transactions harder to trace.
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What is covered by South Korea's Digital Asset Basic Act?
The proposed act seeks a comprehensive crypto framework, including exchange licensing and stablecoin issuance rules. Financial Services Commission Chairman Lee Eog-weon said discussions were nearing completion.
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How will officials prevent regulatory arbitrage between the two bills?
The central bank will consult relevant ministries to minimize regulatory arbitrage if temporary legislative gaps appear before the Digital Asset Basic Act takes shape.
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