South Korea to regulate stablecoins under foreign exchange law

South Korea plans to amend its Foreign Exchange Transactions Act to regulate stablecoins as payment instruments. The Bank of Korea and the government aim to implement these changes by December 2026 to increase oversight of cross-border digital asset transactions and mitigate risks associated with cryptocurrency mixers and unhosted wallets.

The proposed regulatory framework includes mandatory registration and reporting for virtual asset transfer businesses, covering transactions between exchanges and private wallets. A Bank of Korea manual indicates that providers will be required to submit monthly filings detailing digital-asset quantities and month-end values in Korean won for users involved in qualifying cross-border transfers.

This move is being developed alongside the broader Digital Asset Basic Act, which seeks to establish a comprehensive regulatory environment for the cryptocurrency industry, including licensing requirements for exchanges. While market observers have discussed the potential formal recognition of dollar-pegged stablecoins like USDT and USDC, official announcements focus on a registration and reporting framework rather than a blanket reclassification of these assets as legal tender.