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South Korea is getting ready to regulate stablecoins—digital currencies pegged to real-world currencies like the U.S. dollar—that are being used in international payments. The government wants to make sure these transactions are safe and secure.
Teaming Up with Other Countries
South Korea’s financial regulator, the Financial Services Commission (FSC), is planning to work with other countries like Japan and the EU to set up rules for stablecoins. While they haven’t shared a timeline for when this will happen, they’re making it a priority.
Starting with the Won
South Korea is first focusing on stablecoins tied to its national currency, the won, before setting up rules for stablecoins linked to foreign currencies. Once the local rules are in place, they’ll be expanded to cover cross-border payments with other stablecoins.
Looking at What Other Countries Are Doing
Japan introduced its own stablecoin rules after the Terra collapse in 2022, initially banning non-banks from issuing stablecoins. That ban was lifted in 2023. Meanwhile, the EU’s MiCA regulations have already pushed crypto exchanges to drop stablecoins that don’t follow their rules.
South Korea’s Tough Crypto Laws
South Korea has also tightened its own crypto laws recently. As of July 2023, crypto platforms need to have insurance against hacks and keep customer funds separate from their own. If companies break these rules, they could face steep fines or even prison time.
