South Korea Plans to Regulate Stablecoins as Payment Instrum
The South Korean government and the Bank of Korea (BOK) plan to push for an amendment to the Foreign Exchange Transaction Act this year, bringing stablecoins as means of payment and related instruments under regulation, and establishing a crypto asset monitoring mechanism through the foreign exchange information system. The central bank also noted that the lack of regulation around mixers and personal wallets increases the risk of illegal cross-border transactions, and is discussing solutions with the government.
Event Timeline
- [10-23 01:28] Stablecoins proposed to be brought under regulation as payment instruments; South Korean government and central bank push for amendment to the Foreign Exchange Transaction Act (Odaily 全球日报)
- [10-23 02:24] Bank of Korea plans to amend the Foreign Exchange Transaction Act to strengthen regulation of stablecoin payments (PANews)
- [10-23 10:06] South Korean government and central bank plan to amend the Foreign Exchange Transaction Act, bringing stablecoins under regulation as means of payment (吴说)
Background and Impact
According to a PANews report on October 23 citing Digital Asset, the South Korean government and the Bank of Korea (BOK) plan to push for an amendment to the Foreign Exchange Transaction Act this year, aimed at regulating stablecoins (including their use as means of payment). In a business conditions report submitted to the National Assembly audit, the Bank of Korea stated that it is consulting with the government on measures for "how to regulate cross-border transactions involving virtual assets (digital assets)." Wu Blockchain reported the same day that the report submitted by the central bank to the National Assembly on October 22 was worded as "planning to draft an amendment to the Foreign Exchange Transaction Act within this year" — the wording on progress differs slightly between the two accounts, one saying "push for amendment" and the other "draft an amendment," and the materials do not further clarify whether both refer to the same milestone.
The Bank of Korea added that it is preparing to establish a virtual asset monitoring system, including reporting through the foreign exchange data network (phrased by Wu Blockchain as "establishing a crypto asset monitoring mechanism through the foreign exchange information system"), while also planning to work with the government to draft an amendment to the Foreign Exchange Transaction Act this year to regulate stablecoins as means of payment and related instruments. The central bank noted that anonymous technologies such as mixers and the regulatory gap around personal wallets increase the risks of illegal cross-border transactions, and that it will cooperate with relevant departments to prevent the market from exploiting regulatory gaps during the transition period of digital asset legislation to evade regulation. The move is described as a response to demands raised during last year's National Assembly audit, when the Assembly urged the Bank of Korea to "globalize payment infrastructure and establish a virtual asset regulatory framework."
According to a separate Odaily 全球日报 report, South Korea is currently drafting the Digital Asset Basic Act, which would establish a licensing system for crypto exchanges and set rules related to stablecoin issuance. The above legislative developments suggest that South Korea may advance rules on two fronts simultaneously: payment instruments, cross-border transactions, and exchange access; and stablecoin issuance. The materials do not publish the specific provisions, effective date, or scope of application of the amendment. For readers following the pace of policy implementation in South Korea, entry information for major trading platforms (欧易OKX注册APP下载, 火币HTX注册APP下载, 芝麻Gate.io注册APP下载, Bitget注册APP下载, 币安binance注册APP下载) can serve as a reference for searches, and is not directly related to this legislative progress itself.
FAQ
### What stage is this amendment currently at, and when might there be clear results?
The materials show that the South Korean government and the central bank plan to push for an amendment to the Foreign Exchange Transaction Act this year and to draft the amendment within this year; it is currently at the consultation and drafting preparation stage, including establishing a virtual asset monitoring mechanism. The specific provisions, review process, and effective date are not disclosed in any of the three sources.
### What links does the regulatory focus cover?
The materials cover three areas: the use of stablecoins as means of payment and related instruments, regulation of cross-border transactions involving virtual assets, and the crypto asset monitoring mechanism (reporting through the foreign exchange data network or the foreign exchange information system). In addition, the Digital Asset Basic Act is set to establish an exchange licensing system and stablecoin issuance rules.
### Why emphasize the risks of mixers and personal wallets in particular?
In the report submitted to the National Assembly on October 22, the Bank of Korea noted that anonymous technologies such as mixers and the regulatory gap around personal wallets increase the risk of illegal cross-border transactions, and stated that it will cooperate with relevant departments to prevent the market from exploiting regulatory gaps during the transition period of digital asset legislation to evade regulation.