South Korea to Fold Stablecoin Cross-Border Rules Into FX Law

South Korea's Ministry of Economy and Finance will write stablecoin overseas-transfer rules only after the National Assembly enacts the Digital Asset Framework Act, then reflect them in the Foreign Exchange Transactions Act, a senior ministry official said on Nov. 11.

Son Sun-young, director of foreign exchange analysis at the ministry, laid out the sequencing at a seminar titled "The Stablecoin Era and the Future of Cross-Border Payments in South Korea," held at Yeouido Post Tower in Seoul. Her remarks set the legislative order of operations: framework act first, foreign exchange amendments second.

The Digital Asset Framework Act, currently under discussion in the National Assembly, is set to include qualification requirements for stablecoin issuers, reserve asset management rules and user protection provisions. Son said that once detailed rules on stablecoin issuance are in place, cross-border transactions involving the tokens will be governed under the Foreign Exchange Transactions Act.

What could change in foreign exchange law?

The ministry's review of an amendment to the Foreign Exchange Transactions Act covers three open questions:

• Whether stablecoins should be classified as an external payment instrument under the existing framework or regulated through a separate regime
• The scope of stablecoin use permitted in current-account and capital-account transactions
• Who should carry out transaction documentation and verification procedures

That last point matters operationally. Assigning documentation duties determines which institutions — banks, exchanges or issuers — bear compliance responsibility for cross-border stablecoin flows, and how reporting obligations will be enforced in practice.

Son said stablecoins hold significant potential for overseas remittances, business-to-business payments and real-time settlement. She added that the ministry will push ahead with formalizing the system after sufficiently reviewing services being prepared across industries, specific business models and market demand, while gathering opinions from stakeholders.

The pace of that review now hinges on the National Assembly. The ministry's timeline is explicit: rules on stablecoin circulation will be prepared once the Digital Asset Framework Act is enacted, with foreign exchange provisions following. Until then, the current-account and capital-account questions stay open.

For payment companies and banks preparing won-linked or dollar-linked stablecoin services, the regulatory vacuum is the constraint — issuer qualifications and reserve requirements remain undefined until the framework act passes.

The practical question is speed. Whether the government can establish a workable framework for cross-border stablecoin transactions quickly depends on when the Assembly moves the framework act, and how much the ministry can resolve on classification and verification before then.