Bank of Korea Moves to Fold Stablecoins Into Forex Law by Year-End

The Bank of Korea plans to draft an amendment to the Foreign Exchange Transactions Act with the government before year-end that would regulate stablecoins as a means of payment, according to a written submission to the National Assembly's annual audit reported by Korean outlet Digital Asset on October 22.

The central bank's report, a follow-up to last year's audit, says it is consulting with the government on measures to regulate cross-border transactions in virtual assets. While building a monitoring system based on foreign exchange network reporting, the bank said it will prepare the amendment this year to regulate stablecoins as a means of payment, among other aims.

Precision matters here, and the register of the document rewards a careful reading. This is a plan to write a bill, not a bill itself. There is no draft text, no named token and no passage date. "Means of payment" is a defined term in Korean forex law: an instrument whose cross-border movement must be reported. On that reading, the amendment would place dollar stablecoins under the same controls as a wire transfer to New York. It would not make them legal tender at a convenience store in Seoul.

Why the central bank is widening the net

The Bank of Korea pointed to three structural gaps it says ease illegal transactions:

• Settlement occurring outside the banking system
• Mixing services obscuring transaction paths
• Regulatory blind spots around personal, self-custodied wallets

For Korean bitcoin holders who self-custody, the operational implication is direct. The country's capital controls are the reason the kimchi premium exists, and a tighter forex net around crypto would entrench those controls rather than ease them. A surveillance layer built on foreign exchange network reporting is designed to see flows; self-custody is designed to obscure them. The two sit in permanent tension, and the amendment signals which side the central bank intends to arm.

What runs in parallel, and what it changes

The forex work does not proceed alone. It runs alongside the Digital Asset Basic Act, the licensing and stablecoin-issuance framework the government flagged in its 2026 growth strategy alongside spot bitcoin ETF approval. Financial Services Commission chairman Lee Eog-weon told lawmakers on Thursday that consultations on the act are in their final stage and the bill will follow as soon as possible, Bloomingbit reported.

Until that law exists, the Bank of Korea said it will work with ministries to limit transactions that exploit the gap. What does this change for exchanges and issuers targeting the Korean market? In practice, an interim enforcement window has opened: two tracks of rulemaking, one through the Foreign Exchange Transactions Act and one through the Digital Asset Basic Act, and firms structuring cross-border stablecoin settlement into Korea now face exposure under both.

The tax clock and the petitions

The gap also has a date attached. Korea's crypto income tax is due to take effect January 1, 2027, according to The Block, after three postponements. Lawmakers have openly questioned the logic of taxing a market before the law defining it has passed.

Lee said Thursday the tax should "take various circumstances into full consideration," per Yonhap. Democratic Party leader Kim Min-seok called Thursday for a "thorough final review" — a notable shift from a party that had previously insisted on the 2027 start date.

Public pressure is quantified. Two petitions, one to repeal the tax outright and one to defer it by two years, each cleared the 50,000-signature threshold that forces a legislative review. That is the mechanism by which ordinary holders converted a policy quarrel into a procedural obligation for the National Assembly.

The National Tax Service has not budged. It plans to finalize its draft tax notice by October 30, Digital Asset reported, which leaves roughly a week between the tax administration locking its guidance and the political leadership visibly softening on the timeline.

The sequencing problem

Strip the details away and the story is a sequencing dispute with hard deadlines. The central bank wants stablecoins inside the forex perimeter before the market-structure law arrives. The market-structure law is in final consultations with no text published. The tax is statute-scheduled for January 1, 2027, after three delays, and the ruling party's leader has just questioned that date for the first time.

For practitioners, the concrete milestones to track are three: the amendment drafting window closing at year-end, the National Tax Service's October 30 draft notice, and the Digital Asset Basic Act's introduction to the Assembly. Whether the tax holds to 2027 may well be decided by which of the two laws crosses the finish line first.