South Korea targets 3 December for oversight of cross-border virtual asset transfers
Key Facts
South Korea aims to implement regulatory amendments to monitor cross-border virtual asset transfers on 3 December 2026, according to a Ministry of Finance and Economy statement published on the Korean government portal. The move concerns a draft amendment to the Enforcement Decree of the Foreign Exchange Transactions Act, to implement the statutory amendment already introduced on 2 June 2026. The ministry set a public comment period of 7 to 26 October 2026 for the draft as part of the process preceding adoption of the implementing rules. Under the draft, virtual asset transfer service providers will be required to report transfer information, bringing their cross-border activities under foreign exchange oversight. The information will be sent to the "Bank of Korea's Foreign Exchange Information System," according to the wording of the government statement. The draft thus places the reporting obligation on transfer service providers and designates the central bank's system as the destination for the information they must submit.
The implementation process follows an earlier plan reported by Reuters that targeted the introduction of the new rules in the second half of 2025 after legislative requirements were completed. Tighter oversight had been proposed in the context of foreign exchange crimes, some of which involved virtual assets. Reuters cited Korean customs authorities as saying these assets were linked to 81.3% of foreign exchange crimes covered by historical statistics. On stablecoin flows, the International Monetary Fund listed Korea among the largest net recipient economies in 2024, alongside Russia, Turkey, Vietnam and Ukraine. The fund said in the online annex to its Global Financial Stability Report that these economies were "the largest recipients in 2024 in terms of net flows." Korea's position in these flows is accompanied by a cautious stance on stablecoins from its central bank because of their potential effects on financial stability and monetary policy, according to the U.S. International Trade Administration.
Alongside the transfer monitoring rules, Korean authorities are examining a legislative framework for stablecoin issuance, distribution and use beyond virtual asset trading. The U.S. International Trade Administration said the Virtual Asset User Protection Act "does not provide a comprehensive framework" for these activities. Discussions cover a model for issuing won-denominated stablecoins based on banks holding ownership stakes in an issuance consortium, with the final structure still under consideration among policymakers. Under the proposed model, banks would own at least 50% of the consortium plus one share, according to the U.S. agency's account. This proposed formula would give banks more than half the ownership of the consortium issuing local-currency stablecoins. Regulation of issuance, distribution and use beyond trading remains a separate legislative process from the draft regulation on monitoring cross-border virtual asset transfers.
The public comment period on the draft regulation ends on 26 October 2026, after which the process moves to regulatory and legal reviews, according to the timetable in the Ministry of Finance and Economy statement. The approval process also includes cabinet deliberations before the implementing amendments take effect. The government aims to bring them into force alongside the amended Foreign Exchange Transactions Act on the specified date in December, so that the statutory rules and their implementing arrangements take effect together. The government is preparing the next regulatory phase for digital assets through the Digital Asset Basic Act, according to the U.S. International Trade Administration. The government and ruling party aim to pass the law by the "end of 2026," the announced legislative deadline for this process. Until its final structure is approved, the model for bank ownership of a won stablecoin issuance consortium remains part of ongoing discussions on the new framework.