Bank of Korea to amend forex law, classify stablecoins as payment

The Bank of Korea plans to file a bill this year amending the Foreign Exchange Transactions Act to regulate stablecoins as a means of payment, the central bank said, according to local outlet Digital Asset. The move would place won- and foreign-currency-linked stablecoins inside Korea's foreign exchange perimeter for the first time.

The amendment will treat stablecoins as payment instruments rather than securities, a classification that carries direct operational consequences for issuers and exchanges operating in the Korean market. The Bank of Korea said it is coordinating with the government on measures covering cross-border transactions in digital assets and will pair the payment designation with a monitoring framework for virtual assets.

Why is the central bank acting now?

The bill responds to last year's National Assembly audit, in which lawmakers pressed the Bank of Korea to bring local payment infrastructure up to global standards. Specific demands included extending the operating hours of large-value payment systems to 8 p.m. and building measures to counter money laundering risks tied to the entry of global crypto exchanges into Korea.

The central bank also committed to building an international cooperation framework against illicit digital asset transactions. It flagged a structural problem: crypto transactions allow cross-border transfers that bypass traditional financial institutions, while mixers and unhosted wallets raise anonymity and make illicit activity easier to execute. The comparison is familiar to enforcement agencies — the same privacy tooling that Western regulators targeted in sanctions actions against mixing services.

What happens to the Digital Asset Basic Act?

The forex amendment runs parallel to a broader legislative effort. The government is developing the Digital Asset Basic Act, which would establish a comprehensive crypto framework including licensing regimes for exchanges and rules for stablecoin issuance.

Lee Eog-weon, chairman of the Financial Services Commission, said Thursday during a hearing that discussions on the bill were nearing completion and that the government will work to introduce it as soon as possible.

The central bank acknowledged a timing risk. It said it will continue consulting with relevant ministries to minimize regulatory arbitrage that could arise from temporary legislative gaps while the Digital Asset Basic Act takes shape — the interval between the forex amendment's passage and the broader act's entry into force.

What does the payment classification change?

Defining stablecoins as payment instruments under forex law gives the Bank of Korea supervisory reach over stablecoin flows that currently sit outside its mandate. Cross-border transfers in stablecoins would fall under the same reporting and monitoring architecture that governs conventional foreign exchange transactions, closing a channel the central bank says enables transfers outside regulated institutions.

The sequencing matters for market participants. If the forex amendment passes before the Digital Asset Basic Act, issuers and exchanges face a window in which payment rules apply while licensing and issuance rules remain unfinished. The central bank's stated priority — minimizing arbitrage across that gap — signals how quickly Korea intends to move once the bill reaches the National Assembly.