The South Korean National Assembly has proposed a bill to include stablecoins under the regulation of the Foreign Exchange Transactions Act for the first time

ChainCatcher news, according to Yonhap News Agency, South Korean National Power Party member Park Sung-hoon will propose an amendment to the Foreign Exchange Transaction Act to include stablecoins within the scope of legally defined payment methods.

The bill aims to amend Article 3, Section 1 "Definitions" to list stablecoins alongside government-issued currency, banknotes, and coins as payment methods. Member Park stated that while the potential for stablecoins, which are pegged to the value of fiat currency, to serve as new payment methods is recognized, their nature differs from existing fiat currencies, leading to their exclusion from being recognized as payment methods under the Foreign Exchange Transaction Act. This creates regulatory blind spots that could result in illegal foreign exchange transactions and tax evasion through stablecoins. The Bank of Korea has previously expressed similar concerns, pointing out that dollar-pegged stablecoins could be used for cross-border current account and capital transactions without the declaration procedures stipulated by the Foreign Exchange Transaction Act, warning that the spread of stablecoins may facilitate illegal transactions that evade foreign exchange regulations. The South Korean Ministry of Economy and Finance has expressed support for this bill, stating that it is in discussions with relevant institutions such as the Financial Services Commission and the central bank to negotiate specific regulatory measures.