South Korea's government and central bank plan to amend the Foreign Exchange Transactions Act to treat stablecoins as payment instruments. The Bank of Korea says it will prepare the bill jointly with the government. Separately, the Digital Asset Basic Act is still taking shape.
The South Korean government and the Bank of Korea plan to revise the Foreign Exchange Transactions Act this year to regulate stablecoins as payment instruments, according to local news outlet Digital Asset.
The central bank said it intends to prepare the bill jointly with the government within this year. The bill would pair the forex amendment with a monitoring framework for virtual assets.
Audit requests behind the bill
The move responds to last year's National Assembly audit. Lawmakers asked the Bank of Korea to expand local payment infrastructure to global standards, such as extending the operating hours of large-value payment systems to 8 p.m.
They also asked for measures to prevent money laundering risks linked to the entry of global crypto exchanges.
Cross-border focus and the Digital Asset Basic Act
The Bank of Korea also said it would focus on building an international cooperation framework against illegal digital asset transactions. It explained that crypto transactions enable cross-border transfers outside traditional financial institutions, while tools like mixers and unhosted wallets increase anonymity and make illicit activities easier to carry out.
Meanwhile, South Korea is developing the Digital Asset Basic Act, which seeks to establish a comprehensive framework for crypto, including licensing regimes for exchanges and rules for stablecoin issuance. Financial Services Commission chairman Lee Eog-weon said Thursday during a hearing that discussions on the bill were nearing completion, and that the government will work to introduce it as soon as possible.
The central bank said it will keep consulting relevant ministries to minimize regulatory arbitrage that could arise from temporary legislative gaps while the Digital Asset Basic Act takes shape.
Source: The Block
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