Stablecoin News: South Korea Stablecoin Investment Rules May Exclude USDT And USDC

South Korean financial regulators are finalizing new guidelines for listed companies looking to invest in digital assets, with a notable decision to exclude major dollar-pegged stablecoins like USDT and USDC from the permitted investment scope. This move is primarily driven by conflicts with the country’s existing foreign exchange laws, which do not yet recognize stablecoins for cross-border payments.

Regulatory Framework and Legal Challenges

The Financial Services Commission is preparing "Corporate Virtual Currency Trading Guidelines" to establish standards for listed firms and professional investment companies engaging with digital assets. However, officials believe that including stablecoins in the initial phase could lead to uncontrolled financial activity. The core issue stems from the Foreign Exchange Transactions Act, which requires foreign payment instruments to be handled through designated foreign exchange banks and does not classify stablecoins as legitimate external payment tools. This legal discrepancy is the main reason for their exclusion from the official guidelines.

Legislative Efforts and Future Outlook

While regulators are cautious, lawmakers are exploring amendments to the Foreign Exchange Transactions Act to potentially recognize stablecoins as forms of payment. A proposal was submitted to the National Assembly in October last year, but it remains under review. Concurrently, authorities are developing the Digital Asset Basic Act (Phase 2 legislation), which is expected to provide more detailed rules for corporate digital asset trading. The final decision on stablecoin inclusion may hinge on the progress of these legislative changes.

Companies' Workarounds and Industry Perspectives

Despite the official exclusion, some South Korean corporations are reportedly finding indirect ways to access and utilize USDT and USDC. These methods include using personal crypto wallets or overseas exchange accounts to manage payments related to international trade, as direct digital asset trading accounts are restricted for firms. Industry sources indicate this practice is growing, driven by the fast settlement and lower transaction costs offered by stablecoins compared to traditional cross-border transfers. Some listed firms have also advocated for the inclusion of stablecoins, citing their reflection of real-time exchange rates and utility for currency hedging, though regulators appear firm on their current stance.