New report from Herald Economy says that while South Korea is preparing to open the crypto market to corporate investors, stablecoins such as USDT and USC may be out of the rulebook.
If stablecoins were to be included in the country’s financial watchdog, it would contradict existing foreign exchange laws that do not consider them as official payment instruments. Early-stage market risks are also a concern for regulators, as is the case with .
South Korea’s Foreign Exchange Transactions Act requires all international transactions to be conducted through licensed foreign exchange banks.
As stablecoins do not qualify as legitimate foreign payment tools under the law, allowing companies to hold them would allow businesses to send payments directly abroad, bypassing the country’s FX control framework (see below).
A proposed amendment to the Foreign Exchange Act that would classify stablecoins as payment instruments is under review, but until approved they are still restricted.
The crypto space in South Korea has long been dominated by retail investors but the authorities’ new Corporate Virtual Currency Trading Guidelines would allow institutional players to enter market after the Digital Asset Basic Act is finalized.
Under the framework, companies could also be able to hold crypto assets like Bitcoin and Ethereum, similar to how some businesses in Western markets manage digital assets on their balance sheets.
While stablecoins have long been a source of foreign exchange barriers in South Korea, the US, policymakers are finalizing unified framework for digital asset markets.
Nevertheless, the legislation (also known as the CLARITY Act) is still in trouble because of ongoing tensions between banks and crypto companies over the problem of stablecoin yields.
VIVIN NTguyen edited this article by Vivian NguYen DisclosureDiscloser This . See our Editorial Policy for details of how we create and review content. ** ** .
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