South Korea to regulate stablecoins under forex law

South Korea is developing the Digital Asset Basic Act to establish a comprehensive framework for crypto assets. In parallel, the Bank of Korea plans to draft an amendment to the Foreign Exchange Transactions Act with the government before year-end. This amendment aims to regulate stablecoins as a means of payment. A written submission to the National Assembly's annual audit, reported by Digital Asset, details this plan. The central bank's October 22 report states it is consulting with the government on measures to regulate cross-border transactions in virtual assets.

The proposed amendment would put dollar stablecoins under the same controls as a wire to New York rather than making them legal tender. The Bank of Korea plans to build a monitoring system based on foreign exchange network reporting. The central bank identified settlement outside the banking system, mixers, and regulatory gaps around personal wallets as factors that ease illegal transactions. The Bank of Korea said it will work with ministries to limit transactions that exploit the gap until the new law exists.

The forex work runs in parallel with the Digital Asset Basic Act, which is part of the government's 2026 growth strategy alongside spot bitcoin ETF approval. Financial Services Commission chairman Lee Eog-weon told lawmakers that consultations are in their final stage and the bill will follow as soon as possible. Separately, Korea's crypto income tax is due to take effect January 1, 2027, after three postponements. Chairman Lee Eog-weon stated that the crypto tax should take various circumstances into full consideration.

Democratic Party leader Kim Min-seok called for a thorough final review of the crypto tax, shifting from a party stance that had insisted on 2027 implementation. Two petitions regarding the crypto tax, one to repeal it and one to defer it two years, each cleared the 50,000 signatures required for legislative review. The National Tax Service plans to finalize its draft tax notice by October 30.