South Korea plans to regulate cross-border stablecoin transactions

South Korea's Ministry of Economy and Finance announced that it is considering taking measures to ensure the integrity of cross-border transactions involving virtual assets such as stablecoins. According to the Korea Economic Daily, the South Korean government is promoting the implementation of foreign exchange controls on cross-border transactions of stablecoins pegged to the US dollar. The Ministry of Economy and Finance pointed out that stablecoins are currently mainly used for transactions and exchanges within the virtual asset ecosystem. However, due to their increasing use in cross-border transactions, they may be expanded to payment and transaction means in the real economy in the future. The Financial Services Commission of South Korea said that it will give priority to discussing stablecoins in the second phase of legislation of the Virtual Asset User Protection Act. An official of the Financial Services Commission said that it will refer to legislative cases in countries and regions such as Japan and the European Union and consult with relevant departments to formulate a plan. A government official revealed that the supervision of stablecoins will first start with the construction of a stablecoin issuance system pegged to the Korean won. The system will establish a legal framework for won-pegged stablecoins and gradually expand to foreign currency-pegged stablecoins on this basis.