South Korea moves to classify stablecoins as payment instruments under forex law

South Korea is rewriting its foreign exchange rulebook to make room for stablecoins. Lawmakers are amending the Foreign Exchange Transactions Act (FETA) so that stablecoins are formally treated as a recognized “means of payment.” That puts dollar-pegged tokens in the same legal category as government-issued notes and banknotes. For a country that has spent years watching these tokens move freely across its borders, the change is meant to close a loophole that has been getting harder to ignore. What the amendment actually does The push targets three specific worries: unregulated cross-border transactions, money laundering, and tax evasion. All three have been linked to dollar-pegged stablecoins, which have grown popular with South Korean users. The underlying concern is foreign exchange risk. When large volumes of dollar tokens circulate domestically, they can function as a shadow channel for moving money abroad. That is precisely the kind of flow FETA was built to monitor in the first place. Authorities are reportedly fast-tracking the amendments. The goal is to have adequate regulatory measures in place by the end of 2026. How South Korea got here The legislative track goes back t...