Bank of Korea to Amend Forex Law to Regulate Stablecoins as Payments

Stablecoins would be regulated as payment instruments under a planned revision of South Korea's Foreign Exchange Transactions Act, which the government and the Bank of Korea intend to prepare this year, according to local outlet Digital Asset. The plan was reported on October 23.

The central bank said it intends to prepare the bill jointly with the government within this year. The amendment would regulate stablecoins as a means of payment and come with a monitoring framework for virtual assets run by the Bank of Korea.

The change would bring stablecoins under South Korea's formal foreign exchange reporting and oversight regime. Until now, stablecoins have generally been handled under the broader virtual-asset framework, without a specific statutory classification.

The plan responds to last year's National Assembly audit. Lawmakers asked the Bank of Korea to bring local payment infrastructure up to global standards, such as extending large-value payment system hours to 8 p.m., and to set measures against money laundering risks tied to the entry of global crypto exchanges.

The central bank also said it will focus on building an international cooperation framework against illegal digital asset transactions, noting that mixers and unhosted wallets increase anonymity.

Digital Asset Basic Act still pending

South Korea is separately developing the Digital Asset Basic Act, a comprehensive crypto framework that includes licensing regimes for exchanges and rules for stablecoin issuance. Financial Services Commission chairman Lee Eog-weon said Thursday at a hearing that discussions were nearing completion and that the government will work to introduce it as soon as possible.

The Bank of Korea acknowledged that temporary legislative gaps while the larger act takes shape could create room for regulatory arbitrage. It said it will keep consulting ministries to minimize that risk.

Context

The move adds to a run of Korean policy activity on digital assets. Earlier this month, finance officials were scheduled to meet crypto exchanges on October 21 as a bill surfaced to delay the crypto capital gains tax by two years.

No timetable for the forex amendment has been given beyond "this year," and the reports do not detail how reporting obligations would apply to stablecoin issuers or users.