South Korea has moved closer to introducing mandatory registration and foreign exchange reporting for cryptocurrency transfers, with new rules scheduled to take effect on December 3, 2026. Summary South Korea’s amended foreign exchange law takes effect December 3, introducing registration for cross-border crypto transfer businesses. The proposed rules cover transfers between cryptocurrency exchanges and private wallets, with reporting to the Bank of Korea. Officials have not confirmed that USDT and USDC will become formally recognized payment instruments under this amendment. Crypto businesses must prepare reporting systems and qualified staff, with public comments on the draft closing October 26. Upbit, Bithumb and other service providers could face new obligations depending on their cross-border transfer activities. According to the Ministry of Finance and Economy’s October 7 legislative notice, the proposed regulations will bring cross-border virtual asset transfers under a formal monitoring system, including transactions involving exchanges and private wallets. The government is accepting public comments until October 26 before finalizing the enforcement requirements. Meanwhile, the changes follow amendments to the Foreign Exchange Transactions Act passed by the National Assembly on May 7 and promulgated on June 2. They establish a new category of registered virtual asset transfer businesses, covering certain services that move cryptocurrencies between South Korea and overseas markets. In an October 19 legal analysis, South Korean law firm Bae, Kim & Lee explained that the draft enforcement decree covers transfers between domestic and foreign virtual asset service providers. Transactions between exchanges and private, unhosted wallets are included because authorities consider them capable of producing similar cross-border effects. The rules would require qualifying operators to register with the finance ministry after completing existing virtual asset reporting obligations. Businesses must connect their systems to the Bank of Korea’s foreign exchange information network and maintain records of relevant transfers. Registration requirements include suitable computer systems and at least two qualified employees at each business office. Those employees must have two years of foreign exchange experience or complete government-approved training. Unlike some foreign exchange business categories, virtual asset transfer businesses would not face a separate minimum equity capital requirement under the draft. Are USDT and USDC becoming official payment instruments? Reports circulating on social media have described the changes as South Korea formally recognizing dollar-backed stablecoins such as Tether’s USDT and Circle’s USDC as payment instruments. Crypto analyst Ash Crypto welcomed the reported development, describing it as a major step toward stablecoin adoption in South Korea. In a post on X, he claimed the country would recognize cryptocurrency stablecoins as an official form of payment starting December 3, calling the development “absolutely massive” for dollar-backed stablecoins in one of Asia’s largest cryptocurrency markets. However, the ministry’s official announcement describes a registration and reporting framework for virtual asset transfer businesses. Its published explanation does not establish a blanket reclassification of USDT or USDC as legally recognized payment instruments. Stablecoin transfers could fall within the new monitoring framework when they involve activities covered by the amended law. That does not automatically grant either stablecoin domestic payment status or remove existing restrictions on foreign exchange transactions. The distinction follows South Korea’s July roadmap for won stablecoins, which set out separate plans for digital currency legislation and foreign exchange reforms. The government has been considering how won-backed tokens could operate within the financial system, but those proposals remain distinct from December’s transfer registration requirements. Upbit and Bithumb face new reporting obligations The proposed framework could affect cryptocurrency exchanges such as Upbit and Bithumb where their activities meet the definition of virtual asset transfer business. Registered operators would have to submit transaction information to the Bank of Korea’s foreign exchange information system. The information could then be shared with the National Tax Service, Korea Customs Service, Financial Supervisory Service and Korea Financial Intelligence Unit. The Financial Services Commission would receive delegated authority over certain supervisory measures and sanctions, while the Financial Supervisory Service would handle inspections. South Korea has already considered expanding crypto transfer licenses beyond exchanges to other financial technology businesses. The draft’s scope includes custody, brokerage and related transfer services, depending on how individual firms operate. The monitoring requirements could affect transfers involving dollar stablecoins traded on Korean exchanges. However, the government has not announced separate USDT trading restrictions, a new tax on stablecoin transfers or specific limits on exchange premiums under this decree. South Korea strengthens oversight of overseas crypto transfers The finance ministry said the reporting system would help authorities identify unauthorized foreign exchange transactions and attempts to avoid existing controls. Its proposal includes stronger sanctions for certain money exchange businesses involved in illegal remittances, voice phishing or unauthorized trade payments. The draft would permit registration cancellation after a first qualifying violation. Maximum administrative surcharges imposed instead of a four-month business suspension would rise to 100% of profits obtained through the violation. Meanwhile, South Korean exchange operator Dunamu has been exploring international stablecoin payments with MoonPay. Their October 21 agreement covers potential cross-border financial services and corporate transactions, but does not establish an operational payment product. Following the October 26 public comment deadline, the draft decree must undergo regulatory and legislative reviews before Cabinet consideration. The government expects the finalized provisions to take effect alongside the amended law on December 3, while separate transitional arrangements give certain existing remittance and money exchange businesses until June 30, 2027, to meet new requirements.
