The Bank of Korea intends to draft, together with the government, an amendment to the Foreign Exchange Transactions Act before the end of the year that would bring stablecoins under regulation as a means of payment. The plan was laid out in a written submission to the National Assembly's annual audit, as reported by the Korean outlet Digital Asset.

In an October 22 report — a follow-up to last year's audit — the central bank said it is consulting with the government on measures to regulate cross-border transactions in virtual assets. While it builds a monitoring system based on foreign exchange network reporting, the bank said it aims to prepare the amendment with the government within the year to regulate stablecoins as a means of payment, among other objectives.

That is a plan to write legislation, not legislation itself. There is no draft text, no named token and no timetable for passage. "Means of payment" is also a defined term in Korean foreign exchange law: an instrument whose cross-border movement must be reported. On that reading, the amendment would subject dollar stablecoins to the same controls as a wire transfer to New York — not confer legal-tender status at a Seoul convenience store.

The BOK identified settlement taking place outside the banking system, mixers and regulatory gaps around personal wallets as factors that facilitate illegal transactions. Bitcoin holders self-custody in Korea have reason to take note: the country's capital controls are what produce the kimchi premium — the historically higher bitcoin prices on Korean exchanges relative to global markets — and a tighter foreign exchange net around crypto would entrench those controls rather than loosen them.

The foreign exchange work is proceeding in parallel with the Digital Asset Basic Act, the licensing and stablecoin-issuance framework that the government's 2026 growth strategy flagged alongside spot bitcoin ETF approval. One track would govern how virtual assets cross the border; the other, who may be licensed to issue stablecoins. Financial Services Commission Chairman Lee Eog-weon told lawmakers Thursday that consultations are in their final stage and the bill will follow as soon as possible, Bloomingbit reported. The BOK said it will coordinate with relevant ministries to limit transactions that exploit the regulatory gap until that law is in place.

South Korea's crypto tax debate

The regulatory gap carries a deadline. Korea's crypto income tax is scheduled to take effect on January 1, 2027, according to The Block, following three postponements, and lawmakers have questioned the logic of taxing a market before the law defining it has been passed.

Lee said Thursday that the tax should "take various circumstances into full consideration," according to Yonhap. Democratic Party leader Kim Min-seok called Thursday for a "thorough final review," a notable shift for a party that had previously insisted on the 2027 date.

Two petitions — one seeking repeal of the tax and another seeking a two-year deferral — have each surpassed the 50,000 signatures required to compel a legislative review.

The National Tax Service, meanwhile, has not moved: it plans to finalize its draft tax notice by October 30, Digital Asset reported. The near-term markers are set — the tax notice due this month, the foreign exchange amendment targeted before year-end — while the timing of the Digital Asset Basic Act and the fate of the January 1, 2027 start date remain the debate's open questions.

This article first appeared on Bitcoin Magazine and was written by Micah Zimmerman.