Korea eyes FX rules for stablecoins used in cross-border trade: report

South Korea is planning to impose exchange controls on stablecoins, highlighting the government’s concerns about the increasing use of stablecoins in cross-border trade.

South Korea is considering the imposition of exchange controls on stablecoins, reflecting government concerns about their increasing use in cross-border trade, Korea Economic Daily has learned. The Ministry of Economy and Finance is reportedly reviewing measures to increase the stability of crypto transactions, especially those involving stablecoins.

Although stablecoins are widely used only in the cryptocurrency ecosystem, the ministry believes that they may soon function as a payment and transaction method in the real economy. The report states that concerns are expressed that these assets operate outside government oversight and pose a risk to the stability of the South Korean foreign exchange market.

Although no specific timeline has been announced, the Financial Services Commission is expected to prioritize discussions on stablecoin regulation in its upcoming legislative work, drawing on regulatory frameworks established in Japan and the European Union.

The potential regulatory change follows broader efforts by the South Korean government to tighten oversight of the domestic crypto market. As crypto.news reports, Korean crypto exchanges such as Upbit, Bithumb, and Coinone will have to pay an oversight fee to South Korea’s Financial Supervisory Service starting next year as the country steps up its regulatory framework for cryptocurrency. sector.

Local industry representatives initially suggested delaying the implementation of audit fees on crypto operators. However, the decision to implement these fees was accelerated due to inspections by the FSS following the entry into force of the Virtual Asset User Protection Act.

The new law imposes several requirements for cryptocurrency exchanges, including a requirement that at least 80% of users’ assets be kept in cold storage. These assets need to be kept separate from company funds and invested in “risk-free” assets to generate returns. Additionally, exchanges must re-evaluate listed assets by verifying their circulation and reviewing their technical whitepapers, along with assets that do not meet the criteria that should be delisted.

The latest move comes after the 20% crypto earnings tax was postponed by South Korea’s Ministry of Economy and Finance, and reports indicate that the ruling party may postpone the tax until 2028.