South Korea Wants Stablecoins Written Into Its Forex Law Within The Year

South Korea is working on ways to regulate stablecoins within its existing Foreign Exchange Transactions Act, ahead of a more comprehensive Digital Asset Basic Act. The central bank, in collaboration with the government, plans to submit a bill amending the forex law to treat stablecoins as a payment instrument by the end of the year.

This effort follows a previous audit that highlighted the need for local payment infrastructure to meet global standards and to prevent money laundering risks associated with crypto exchanges. The Bank of Korea is focusing on building an international cooperation framework to counter illegal digital asset transactions, citing the ease of anonymity provided by tools such as mixers and unhosted wallets.

The broader Digital Asset Basic Act, which is also in development, aims to establish licensing regimes for exchanges and rules for stablecoin issuance. While the forex amendment provides a temporary regulatory framework, it is expected that the comprehensive digital asset framework will follow soon.