South Korea Stablecoin and RWA Regulation Draft

South Koreas ruling Democratic Party is preparing a comprehensive bill draft that classifies stablecoins as foreign currency payment instruments and mandates the safekeeping of tokenized real-world assets (RWAs). According to Seoul Economic Daily, the Digital Asset Basic Act draft defines stablecoins used in cross-border transactions as “payment instruments” under the Foreign Exchange Transactions Act, subjecting related businesses to strict supervision. This step indicates a deepening of regulation in the crypto ecosystem.

South Korea Democratic Party Stablecoin Draft Highlights

The bill directly affects stablecoin issuers by prohibiting interest payments and demands that the Financial Services Commission (FSC) set interoperability standards between digital asset networks. This draft, which Cointelegraph could not independently verify, aligns with Bank of Korea (BOK) Governor Lee Chang-yongs warning that stablecoins could complicate capital flows. This reflects the increased risk perception following the Terra/Luna collapse.

Classification of Stablecoins as Foreign Currency Payment Instruments

Cross-border stablecoin transactions fall under the Foreign Exchange Transactions Act, gaining payment instrument status. This mandates issuers to comply with capital controls. Technically, pegged assets like USDT or USDC will now be subject to traditional financial oversight mechanisms, increasing liquidity reporting.

Mandatory Custody Funds for RWA Tokens

RWA issuers must hold underlying assets (such as real estate, bonds) in custody funds managed according to the Capital Markets Act. This makes oracle integrations and custody solutions critical. The following table summarizes the drafts RWA rules:

Interest Ban and Digital Network Interoperability

The prohibition on interest distribution to stablecoin issuers limits DeFi applications like yield farming. Standards set by the FSC will standardize interoperability protocols for cross-chain bridges, affecting RWA projects on Ethereum and other chains.

Reporting Exemption for Stablecoin Payments for Goods

A positive aspect of the bill is exempting certain stablecoin payments for goods and services from reporting requirements. This encourages everyday crypto spending while aiming to prevent capital flight. The BOK Governors warnings on capital flows balance this exception.

Stablecoin Regulation Impacts on BTC and Crypto Market

South Korea is one of Asias largest crypto markets. This draft strengthens the regulation trends highlighted in BTC detayli analiz. Stablecoin tightening could affect BTC futures (BTC vadeli islemler) and slow RWA growth, potentially increasing BTC dominance. Experts note that custody standards provide security similar to ETFs like BlackRock.