TechFlow news, October 8 — According to the Korea Economic Daily, the South Korean government is advancing plans to impose foreign exchange controls on cross-border transactions involving U.S. dollar-pegged stablecoins. The Ministry of Economy and Finance stated that stablecoins are currently primarily used for trading and exchanging within virtual asset ecosystems. However, given their increasing use in cross-border transactions, they may eventually expand into payment and transaction methods within the real economy.
The Financial Services Commission said it will prioritize discussions on stablecoins during the second phase of legislation for the Virtual Asset User Protection Act. A commission official noted that South Korea will refer to legislative models from Japan, the European Union, and other jurisdictions while consulting with relevant agencies to develop its regulatory framework. A government official revealed that regulation of stablecoins will initially focus on establishing a system for issuing won-pegged stablecoins. This system will create a legal framework for Korean won-pegged stablecoins, which will then gradually extend to stablecoins pegged to foreign currencies.
