The Bank of Korea intends to collaborate with the government before the end of the year on an amendment to the Foreign Exchange Transactions Act. According to a written submission to the National Assembly’s annual audit covered by the Korean news outlet Digital Asset, the proposal aims to regulate stablecoins as a payment method.
Released on October 22 as a follow-up to last year’s audit, the central bank report indicates that consultations with the government are underway regarding regulations for cross-border virtual asset transactions.
The bank stated that while it establishes a monitoring system driven by foreign exchange network reporting, it aims to formulate the amendment alongside the government this year to govern stablecoins as a means of payment, among other objectives.
This initiative represents a legislative plan rather than a finalized bill, meaning there is no current draft text, specific token named, or scheduled passage date. Furthermore, “means of payment” carries a precise definition under Korean forex law as an instrument requiring mandatory reporting for cross-border movements.
Consequently, this interpretation suggests the amendment would subject dollar stablecoins to the same oversight as a wire transfer to New York, rather than establishing them as legal tender for purchases at local convenience stores.
The BOK highlighted that out-of-banking-system settlements, privacy mixers, and regulatory blind spots surrounding personal wallets contribute to facilitating illicit transactions. Individuals in Korea who hold bitcoin via self-custody should observe these developments closely, as the nation’s capital controls drive the existence of the kimchi premium, and tightening the forex net around crypto will reinforce these restrictions rather than loosen them.
This forex initiative operates concurrently with the Digital Asset Basic Act, which serves as the licensing and stablecoin-issuance framework highlighted in the government’s 2026 growth strategy alongside the approval of spot bitcoin ETFs.
Lee Eog-weon, chairman of the Financial Services Commission, informed lawmakers on Thursday that discussions are nearing their final stage and the legislation will be introduced promptly, as reported by Bloomingbit.
The BOK noted it will cooperate with relevant ministries to restrict transactions exploiting these loopholes until that legislation is enacted.
South Korea’s crypto tax discussions
A specific timeline governs this regulatory gap. Following three prior delays, South Korea‘s crypto income tax is scheduled to launch on January 1, 2027, according to The Block, prompting lawmakers to question the logic of taxing an asset class before foundational defining laws are enacted.
Yonhap reported that Lee stated Thursday the tax must “take various circumstances into full consideration.” Meanwhile, Democratic Party leader Kim Min-seok advocated for a “thorough final review” on Thursday, marking a pivot for a political party that had previously maintained a firm stance on the 2027 enforcement date.
Two separate petitions—one seeking to repeal the tax and another proposing a two-year deferral—have each surpassed the 50,000-signature threshold required to trigger a mandatory legislative review.
Meanwhile, the National Tax Service maintains its current trajectory, with Digital Asset reporting that the agency intends to finalize its draft tax notice by October 30.
Frequently Asked Questions
What is the Bank of Korea planning for stablecoins?
The central bank plans to draft an amendment to the Foreign Exchange Transactions Act with the government before the end of the year to regulate stablecoins as a means of payment.
Does this amendment make stablecoins legal tender in South Korea?
No. It classifies them as a “means of payment” under forex law, meaning their cross-border movement must be reported, similar to a traditional wire transfer.
When is South Korea’s crypto income tax scheduled to take effect?
Following three previous postponements, the crypto income tax is slated to go into effect on January 1, 2027.
What is the Digital Asset Basic Act?
It is a licensing and stablecoin-issuance framework that the government included in its 2026 growth strategy alongside spot bitcoin ETF approval.
