South Korea plans forex law change to treat stablecoins as payment instruments
The Bank of Korea and the government aim to prepare a bill this year, while the Digital Asset Basic Act nears completion.
REGULATIONSTABLECOINS & CBDC
Lukas Brenner
10/23/20261 min read
South Korea's government and the Bank of Korea plan to revise the Foreign Exchange Transactions Act this year so that stablecoins are regulated as a means of payment, The Block reported on October 23, citing local outlet Digital Asset. The central bank said it is coordinating with the government on rules for cross-border digital asset transactions and a monitoring framework for virtual assets.
The plan responds to last year's National Assembly audit, in which lawmakers asked the central bank to bring payment infrastructure up to global standards and to address money laundering risks tied to global crypto exchanges entering the market. The Bank of Korea also plans an international cooperation framework against illegal digital asset transactions, citing mixers and unhosted wallets as sources of anonymity.
Separately, the Digital Asset Basic Act would introduce licensing for exchanges and rules for stablecoin issuance. Financial Services Commission Chairman Lee Eog-weon told a hearing on October 22 that discussions on the bill were nearing completion and that the government would introduce it as soon as possible. The central bank said it will work to limit regulatory arbitrage in the meantime.
Source: The Block.