South Korea plans to impose exchange controls on stablecoins, highlighting the government’s concerns about their growing use in cross-border trade.
South Korea is considering introducing exchange controls for stablecoins, reflecting the government’s concerns about the growing use of stablecoins in cross-border transactions, the Korean Economic Newspaper reported. The Ministry of Economy and Finance is reportedly considering measures to increase the stability of cryptocurrency transactions, especially those related to stablecoins.
Although stablecoins are widely used only within the cryptocurrency ecosystem, the ministry believes that they may soon serve as a means of payment and transaction in the real economy. The report raises concerns that these assets are being operated outside of government oversight and pose a risk to the stability of South Korea’s foreign exchange market.
Although no specific schedule has been announced, the Financial Services Commission is expected to prioritize discussions on stablecoin regulation in its upcoming legislative efforts, drawing on the regulatory frameworks established in Japan and the European Union. .
The potential regulatory changes follow the South Korean government’s broader efforts to tighten oversight of the domestic cryptocurrency market. As South Korea strengthens its crypto regulatory framework, South Korean crypto exchanges such as Upbit, Bithumb, and Coinone will soon be required to pay monitoring fees to the Korean Financial Supervisory Service starting next year, as reported by crypto.news. It will be imposed. sector.
Local industry representatives initially proposed delaying the imposition of supervisory fees on virtual currency operators. However, the decision to introduce these fees was rushed due to the upcoming inspection by the Financial Supervisory Service due to the enforcement of the Virtual Asset User Protection Act.
The new law introduces several requirements for cryptocurrency exchanges, including the obligation to keep at least 80% of users’ assets in cold storage. These assets must be kept separate from the company’s funds and invested in “risk-free” assets to generate yield. In addition, exchanges will need to reevaluate listed assets by checking circulation status and reviewing white papers to include assets that do not meet the necessary criteria for delisting.
The recent implementation follows South Korea’s Ministry of Economy and Finance’s postponement of a 20% virtual currency gains tax, with some reports suggesting the ruling party may postpone the tax until 2028.
