South Korea is implementing stricter regulations on stablecoins, particularly those tied to the South Korean Won and the US dollar. The Financial Services Commission (FSC) has prioritized stablecoin oversight in the second phase of the Virtual Asset User Protection Act, aiming to enhance security and prevent fraud.
Cross-border foreign exchange rules under consideration
The government is also considering foreign exchange rules for cross-border stablecoin transactions, mirroring regulatory approaches in Japan and the European Union. Additionally, South Korea has introduced a $220,000 supervisory fee for domestic crypto exchanges, requiring them to maintain 80% of users’ assets in cold storage.
Implications for Crypto Investors and Exchanges
These regulations are expected to have far-reaching effects on South Korea’s digital asset ecosystem. The strengthened oversight could lead to greater investor confidence but may also limit the flexibility of exchanges operating in the country. Experts predict that firms will need to adapt compliance measures quickly to avoid penalties, while traders might explore alternative platforms with fewer restrictions.
Shogun Lin
