South Korea plans to draft a bill this year to amend its foreign exchange law and regulate stablecoins as a means of payment.
The South Korean government and the Bank of Korea are working on a regulation that would bring stablecoin payments under the Foreign Exchange Transactions Act. According to a report by local publication Digital Asset, the central bank aims to draft the bill with the government this year and establish a monitoring framework for virtual asset transactions.
The plan follows requests raised during last year’s National Assembly audit. Lawmakers had called for the operating hours of large-value payment systems to be extended to 20.00 and for measures to address money laundering risks linked to the entry of global crypto exchanges into the country.
Central bank to establish international cooperation to combat illegal digital asset transactions
The central bank said it would focus on establishing international cooperation to combat illegal digital asset transactions. It noted that crypto assets enable cross-border transfers outside traditional financial institutions, while tools that obscure transaction trails and wallets not connected to a centralized platform can facilitate illegal activity by increasing user anonymity.
South Korea is also working on a separate Digital Asset Basic Act, which is expected to include licensing rules for exchanges and regulations on stablecoin issuance. Financial Services Commission Chairman Lee Eog-weon said during a session on Thursday that discussions on the bill were nearing completion and that the government would work to introduce the regulation as soon as possible.
The central bank will continue discussions with relevant ministries to reduce the risk of exploiting any temporary regulatory gaps that may arise while the Digital Asset Basic Act is being drafted.
Not investment advice.