Bank of Korea Moves to Put Stablecoins Under Forex Controls by Year-End
The Bank of Korea wants dollar stablecoins treated as a 'means of payment' under the Foreign Exchange Transactions Act, with an amendment drafted before 2027. That's a reporting net, not legal tender, and it collides with a crypto income tax due January 1, 2027.
The Bank of Korea is drafting an amendment to the Foreign Exchange Transactions Act with the government before year-end, and stablecoins are the target. The plan, disclosed in an October 22 submission to the National Assembly's annual audit, would classify dollar-pegged tokens as a "means of payment" under Korean forex law.
That phrase matters more than the headline. In Korean law, a means of payment is an instrument whose cross-border movement must be reported. So this isn't a legal tender play. It's a reporting net. A USDT transfer to an offshore venue would sit in the same bucket as a wire to New York.
The central bank laid out its reasoning plainly: settlement outside the banking system, mixers, and gaps around personal wallets all make illegal transactions easier to hide. There's no draft text yet. No named token. No passage date. The bank says it's consulting ministries on cross-border virtual asset flows and building a monitoring system on the existing forex network.
Here's what matters: Korea's capital controls are the entire reason the kimchi premium exists. Tighten the forex net around crypto and you don't erase the premium, you entrench it. Bitcoin holders who self-custody in Seoul should read this as a compliance story, not a ban. Frankly, it's the opposite of liberalization.
The forex work runs alongside the Digital Asset Basic Act, the licensing and stablecoin issuance framework tied to the 2026 growth strategy that also flagged spot bitcoin ETF approval. FSC chairman Lee Eog-weon told lawmakers Thursday that consultations are in their final stage and the bill will follow as soon as possible.
Then there's the tax collision. Korea's crypto income tax takes effect January 1, 2027, after three postponements. Lawmakers are now asking how you tax a market before you've passed the law that defines it. Democratic Party leader Kim Min-seok called for a "thorough final review," a real shift for a party that had insisted on 2027. Two petitions, one to repeal and one to defer two years, each cleared the 50,000 signatures that force a legislative look. The National Tax Service hasn't blinked. Its draft tax notice is due by October 30.
Watch that October 30 notice. If the NTS holds the date while the forex amendment slips, Korea ends up taxing a market it hasn't legally defined, and that's a positioning headache no institution wants to underwrite.