Bank of Korea Wants Stablecoins Written Into Forex Law as Crypto Bill and Tax Fight Come to a Head
Bitcoin Magazine Bank of Korea Wants Stablecoins Written Into Forex Law as Crypto Bill and Tax Fight Come to a Head The Bank of Korea told lawmakers it will draft a forex law amendment this year to r...
The Bank of Korea told lawmakers it will draft a forex law amendment this year to regulate stablecoins as a means of payment, a plan that points to tighter cross-border controls rather than legal-tender status.
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.
The central bank’s October 22 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 plans to prepare the amendment with the government this year to regulate stablecoins as a means of payment, among other aims.
That is a plan to write a bill, not a bill in itself. There is no draft text, no named token and no passage date. And “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 put dollar stablecoins under the same controls as a wire to New York, not make them legal tender at a Seoul convenience store.
The BOK pointed to settlement outside the banking system, mixers and regulatory gaps around personal wallets as factors that ease illegal transactions. Bitcoin holders who self-custody in Korea should take note: 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.
The forex work runs in parallel with the Digital Asset Basic Act, the licensing and stablecoin-issuance framework flagged alongside spot bitcoin ETF approval in the government’s 2026 growth strategy.
Financial Services Commission chairman Lee Eog-weon told lawmakers Thursday that consultations are in their final stage and the bill will follow as soon as possible, Bloomingbit reported.
The BOK said it will work with ministries to limit transactions that exploit the gap until that law exists.
The gap has a date attached. Korea’s crypto income tax is due to take effect January 1, 2027, according to The Block, after three postponements, and lawmakers have questioned taxing a market before the law defining it is 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 shift from a party that had insisted on 2027.
Two petitions, one to repeal the tax and one to defer it two years, each cleared the 50,000 signatures that force a legislative review.
The National Tax Service has not moved: it plans to finalize its draft tax notice by October 30, Digital Asset reported.
Asanat Analysis — Why it matters
South Korea's central bank pushing stablecoins into forex regulation signals a pivotal shift from treating digital assets as peripheral to mainstream finance. By anchoring stablecoins within existing currency frameworks rather than creating siloed crypto rules, the BoK is effectively legitimizing them as financial infrastructure while asserting monetary policy oversight. This regulatory domestication matters because it establishes precedent for how major economies treat dollar-pegged tokens—not as speculation vehicles but as payment rails requiring reserve backing and compliance with capital controls.
The timing reveals deeper tensions within South Korea's crypto policy. A stablecoin forex amendment runs parallel to unresolved tax frameworks and a stalled comprehensive crypto bill, suggesting the BoK is moving unilaterally to fill regulatory gaps rather than waiting for legislative consensus. This fragmented approach risks creating compliance confusion for platforms and users, but it also signals that Seoul's financial authorities view stablecoins as too operationally significant to leave undefined. Precedent-setting here matters globally: South Korea is the 5th-largest crypto market by volume, so how it structures stablecoin integration will influence regulatory design elsewhere.
Historical context: South Korea banned leverage trading and struggled with exchange solvency issues throughout 2023-2024, creating institutional skepticism toward unregulated crypto finance. Folding stablecoins into forex law suggests policymakers learned that total prohibition creates shadow markets, not safety. Codifying stablecoins this way also protects against unanchored algorithmic stablecoins or fully fractional-reserve designs—a direct response to Terra/Luna's collapse, which devastated Korean retail investors.