South Korea Proposes Legal Recognition for Stablecoins as Payment Methods

According to PANews, South Korean lawmaker Park Sung-hoon from the People Power Party is set to introduce a revision to the Foreign Exchange Transactions Act, aiming to officially recognize stablecoins as legitimate payment methods. This legislative move seeks to address regulatory gaps in current laws and prevent the use of stablecoins for illegal activities such as money laundering and tax evasion. The proposed amendment will add stablecoins to the definition of payment methods in Article 3, Section 1, granting them the same legal status as traditional payment tools like government-issued currency, banknotes, and coins. This initiative aligns with concerns raised by the Bank of Korea, which recently submitted a written opinion to the National Assembly expressing worries about the potential risks of dollar-backed stablecoins. The central bank highlighted that these stablecoins could bypass the reporting procedures outlined in the Foreign Exchange Transactions Act, potentially being used for transactions related to current and capital accounts between countries.