South Korean lawmakers propose legislation to prevent the use of stablecoins to evade foreign exchange regulations

ChainCatcher news, according to the Korea Herald, South Korea's People Power Party member Park Sung-hoon will lead the proposal for an amendment to the "Foreign Exchange Transaction Act," aiming to officially include stablecoins as a legally recognized means of payment.

This move is intended to fill the regulatory gaps in current laws, fundamentally eliminating the use of stablecoins for illegal activities such as money laundering and tax evasion. The amendment explicitly adds stablecoins as one of the means of payment in the definition clause of Article 3, Section 1, which means that stablecoins will gain the same legal status as traditional payment tools such as government-issued banknotes, bank certificates, and coins in South Korea. This legislative trend echoes the concerns raised by the Bank of Korea. In a recent written opinion submitted to the National Assembly, the Bank of Korea expressed concerns about the potential risks of dollar stablecoins, pointing out that they "may bypass the reporting procedures stipulated in the Foreign Exchange Transaction Act and be used for transactions in the current account and capital account between countries."