South Korea to block firms from using USDT, USD Coin

South Korean financial regulators do not want to let firms use their balance sheets to buy US dollar-pegged stablecoins like Tether’s USDT and USD Coin.

Guidelines issued by the Financial Services Commission to the domestic crypto industry currently forbid exchanges from opening corporate wallets for South Korean firms. The FSC is ready to reform these guidelines this year, following a lengthy wait.

But firms hoping to launch USDT treasuries or use US dollar-pegged coins to conduct cross-border trade are likely to be thwarted by the regulators’ new rules, South Korean newspaper Herald Kyungjae reported.

“I understand that the corporate guidelines taskforce has concluded its deliberations on this matter. The decision is final,” an unnamed source close to the taskforce told the newspaper.

The development will come as a major blow for South Korean companies, who have been waiting years for the chance to make crypto investments.

Many complain the FSC has allowed Japanese and US-based firms to steal a march on them, building several multi-billion dollar Bitcoin treasuries.

Trade firms frustrated

The decision comes as a major blow for several unnamed stock exchange-listed companies active in the cross-border trade sector, the newspaper wrote.

These firms have reportedly asked regulators to let them make corporate investments in USDT and USD Coin so they can conduct deals using real-time exchange rates.

This kind of trading, they say, would let them reduce risk when doing business overseas.

Their lobbying efforts bore fruit in October, when lawmakers drafted a bill that, if passed, would allow companies to use stablecoins as a means of payment.

However, this draft law remains under review at the committee stage in the National Assembly. And while lawmakers deliberate, the FSC is choosing instead to act.

Sources told the newspaper the FSC wants to channel trade deals through foreign exchange banks, rather than letting companies deal directly with overseas partners.

The regulator also reportedly wants to prevent firms from making “indiscriminate investments” in “the early stages of the market.”

The FSC’s tentatively named Corporate Cryptocurrency Trading Guidelines are set to roll out in the weeks ahead, sources said.

Crypto market movers

• Bitcoin prices have fallen to $67,304, dropping just under 1% over the past 24 hours.
• Ethereum prices are down at $1,944, falling over 2% over the same period.

What we’re reading

• Farage aide ‘Posh George’ loses $655,000 betting on Iran invasion on Polymarket — DL News
• How crypto is becoming a massive divorce problem — DL News
• The $30 trillion gold mine sitting in your driveway— Milk Road
• Bitcoin: Boom or bust—CNBC
• Binance slams $1.7bn Iran probe from US Senators, calls reports ‘defamatory’— DL News

Tim Alper is a News Correspondent at DL News. Got a tip? Email him at tdalper@dlnews.com.