South Korea Bars Stablecoins from Corporate Crypto Investment Guidelines Over Legal Conflict

TLDR:

• South Korea FSC excludes USDT and USDC from corporate crypto investment guidelines over legal conflicts.
• The Foreign Exchange Transactions Act does not recognize stablecoins as a valid external payment method.
• Listed companies may invest in the top 20 non-stablecoin assets, capped at 5% of their own capital.
• A pending amendment to the Foreign Exchange Act could eventually open the door for stablecoin inclusion.
  

Stablecoins, including USDT and USDC, are set to be excluded from South Korea’s corporate cryptocurrency investment guidelines.

South Korea’s Financial Services Commission (FSC) is preparing rules to allow listed companies to trade digital assets.

According to Herald Economy, regulators have opted to keep dollar-pegged stablecoins out of the approved investment list.

The decision stems from a conflict with the Foreign Exchange Transactions Act. This law does not currently recognize stablecoins as a legal external payment method.

Legal Conflict Shapes the Stablecoin Decision

South Korea’s Foreign Exchange Transactions Act requires external payments to go through designated foreign exchange banks. Stablecoins are not classified as external payment instruments under this law.

Allowing corporate investment in stablecoins would create a direct legal contradiction. The FSC chose to exclude stablecoins from the new corporate investment guidelines.

A partial amendment to the Foreign Exchange Transactions Act was introduced to the National Assembly in October. The amendment aims to formally recognize stablecoins as a means of payment.

The bill, however, remains under review and has not yet been passed. Until the law changes, stablecoins cannot be included in corporate investment guidelines.

Instead, the FSC plans to permit the top 20 non-stablecoin digital assets by market capitalization. Bitcoin and Ethereum are among the assets expected to be approved under these rules.

Investment amounts may also be capped at 5% of a company’s own capital. This limit is designed to reduce exposure during the early market stages.

Some listed companies with cross-border trade had requested stablecoin inclusion in the guidelines. They argued stablecoins support exchange rate hedging and fast international settlements.

The FSC, however, maintained its position and excluded stablecoins from the permitted investment list.

Corporate Stablecoin Access Remains Outside Regulated Guidelines

Even without official guidelines covering stablecoins, companies can still trade them through other channels. Personal wallets like MetaMask and overseas exchanges such as Coinbase’s OTC platform remain accessible to corporations.

These transactions, however, operate outside any officially regulated framework. The guidelines do not block companies from using stablecoins entirely.

Authorities noted that some companies already use stablecoins through personal accounts or overseas exchange platforms for trade.

These transactions occur outside formal banking channels. The FSC acknowledged this but still chose not to formalize stablecoin use in the guidelines. Regulators placed legal consistency above industry convenience in this case.

An industry insider confirmed the corporate guidelines task force has wrapped up its work. “I know that the working task force on corporate guidelines has been completed,” the insider said.

They added, “It is in line with the legislative status of the Phase 2 Digital Asset Framework Act, so we have to wait and see, but it is a knotted situation.” Progress, therefore, depends heavily on how the broader legal framework develops.

The FSC’s approach signals a cautious entry into corporate digital asset participation. By limiting access to top non-stablecoin assets, regulators aim to manage financial risk.

Companies seeking stablecoin access will likely need to wait for the Foreign Exchange Transactions Act to be amended.

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