Speaking at a press conference, Rhee told Reuters:

“Issuing a won-based stablecoin could make it easier to exchange with dollar stablecoins rather than reducing reliance on them. That could increase dollar stablecoin demand and make forex management difficult for us.”

These remarks come as newly elected President Lee Jae-myung pushes ahead with promised crypto regulation and amid a decline in the country’s forex reserves.

Declining Forex Reserves

Data from the Bank of Korea shows that forex reserves dropped from $415.6 billion in December to $404.6 billion by the end of May — a decrease of $11 billion in six months.

New Crypto Framework Proposed

On June 10, the ruling Democratic Party introduced the Digital Asset Basic Act, which would allow companies with at least $368,000 in equity to issue stablecoins, pending Financial Services Commission (FSC) approval and sufficient reserves for refunds.

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The FSC is also investigating South Korean exchanges’ trading fees, aligning with President Lee’s promise to lower costs for young investors.

Non-Dollar Stablecoins on the Rise

While US dollar-backed stablecoins dominate the market, Circle’s euro-pegged EURC has seen a 156% surge in market cap this year, reaching $203 million.

Circle’s stock rose sharply after U.S. lawmakers expressed support for the GENIUS Act, a proposed stablecoin regulation bill expected to pass the House.

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The post South Korea’s Central Bank Open to Stablecoin, But Warns of Forex Risk appeared first on Coin Engineer.

New President Acts Fast On Stablecoin Promise

Following his recent election win, President Lee Jae-myung has wasted no time delivering on campaign pledges around crypto. His ruling Democratic Party has introduced the “Digital Asset Basic Act,” aiming to permit the issuance of domestic stablecoins and foster a transparent, competitive crypto landscape.

Under the proposal, local companies will be allowed to issue stablecoins if they have a minimum equity capital of 500 million won ($368,000). Issuers must also maintain reserves to back the coins and receive approval from the Financial Services Commission, South Korea’s top financial regulator.

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The legislation seeks to legitimize stablecoin markets and drive broader adoption by ensuring regulatory clarity and investor protection.

Crypto Gains Mass Appeal Across South Korea

Interest in Bitcoin and stablecoins has soared in South Korea. In Q1 of 2024 alone, transactions involving major U.S. dollar stablecoins totaled 57 trillion won ($42 billion) across the country’s five leading exchanges, according to Bank of Korea data.

An estimated one-third of the South Korean population—around 18 million people—is now involved in the crypto market. Building on this momentum, President Lee is also pushing for Bitcoin ETF approvals and the inclusion of Bitcoin in the national pension fund’s investment strategy.

However, these ambitions face resistance from the Bank of Korea, which argues that private stablecoins could undermine the effectiveness of monetary policy.

Crypto Law Boosts Stocks, But Not Without Skepticism

Anticipation around the bill has already impacted financial markets. Shares in digital wallet provider KakaoPay surged up to 45% in five days following the announcement. Still, JPMorgan analysts caution that the rally may be premature, with real benefits from the legislation yet to materialize.

Despite the uncertainty, South Korea’s proactive legislative push sets a bold precedent in Asia’s ongoing crypto regulatory race.

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The post South Korea Moves To Legalize Stablecoins With Bold Crypto Bill appeared first on Coin Engineer.

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If the proposed amendments are passed into law, new executives at crypto companies in South Korea will not be able to assume their positions without obtaining approval from the FSC. According to Money Today, the amendments could come into effect by the end of March.

The proposed regulations also grant the FSC the authority to suspend the license registration of a crypto company under investigation. Last week, Binance announced plans to reduce its stake in South Korean exchange Gopax, which was seen as a response to the FSC’s concerns.

The FSC is seeking public feedback on the proposed amendments until March 4th. South Korea’s move towards stricter regulations and oversight policies in the crypto sector highlights efforts to increase control over the industry.

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South Korea’s leading financial regulator is considering banning local citizens from buying cryptocurrency with credit cards by proposing to change the country’s credit financing laws.

In a legislative announcement dated January 3, the Financial Services Commission (FSC) of South Korea expressed its concerns that the country’s citizens’ shift from fiat currencies to crypto could potentially create risks of illicit capital outflows and money laundering.

The FSC said, “Concerns have been raised about the illegal outflow of overseas funds due to card payments at overseas virtual asset exchanges, as they encourage money laundering, speculation, and speculative activities.” “Accordingly, virtual assets have been stipulated as prohibited for payment.”

Under current laws, local crypto exchanges allow transactions between virtual assets through deposit and withdrawal accounts where the user’s identity can be approved. However, according to local outlet Yonhap, these rules do not apply to foreign crypto exchanges.

The financial services regulator is now seeking public feedback on a proposal that will run until February 13. This process, which will run until February 13, will go through a review stage and is targeting implementation in the first half of 2024.

The post South Korea Proposes to Ban Credit Card Payments for Crypto appeared first on Coin Engineer.

The Financial Supervisory Commission stated that, according to the new guidelines, domestic crypto platform companies must ensure the safekeeping of assets for both their companies and clients. It also added that they need to establish standards for the listing and delisting of cryptocurrencies and enhance information disclosure.

The guidelines also stated that offshore exchanges wishing to operate in Taiwan must register with the FSC.

The guide says, “Foreign virtual asset platform operators who are not registers according to corporate laws and do not declare compliance with anti-money laundering regulations to the FSC, cannot apply for business or target citizens in Taiwan.”

The FSC also specified that crypto exchanges are “not allowed to engage in transactions involving derivative financial products with businesses possessing virtual asset characteristics as their underlying asset.”

Previously, Taiwan had mandated VASPs to comply with anti-money laundering laws since the FSC implemented anti-money laundering rules in 2021.

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Regulations

After the guidelines are officially publish by the FSC, crypto exchanges in Taiwan are expecting to form an industry association and establish self-regulatory rules based on the guidelines.

The nine crypto exchanges currently located in Taiwan are preparing to establish an association in October. The exchanges decided to set up a working group to prepare for the association application.

Among them, Wayne Huang, the founding partner and Group CEO of Taipei-based crypto exchange XREX, stated;

He said that the FSC’s new rules could “give birth to a new industry by providing a solid path for legitimacy, supervision, growth for a new sector.”

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