South Korean Authorities Exclude Stablecoins from Crypto Companies Investment – Details

South Korean authorities are reportedly moving to exclude stablecoins from an incoming framework that would allow listed companies to invest in cryptocurrencies. The decision is reportedly related to existing foreign exchange regulations, but it shows a cautious approach in allowing institutional exposure to the digital asset market.

South Korea’s FSC Leaves Stablecoins Out of Company Options

According to a local media report, Herald Economy, South Korea’s financial regulators are leaning toward removing dollar-denominated stablecoins such as USDC and USDT from the list of digital assets companies will be allowed to hold once the guidelines go into effect.

The regulatory framework being designed by the National Financial Services Commission (FSC) is intended to allow publicly listed companies to invest in cryptocurrencies. However, regulators believe that including stablecoins in the approved investment list would conflict with the existing legal framework regarding cross-border payments.

In essence, stablecoins are cryptocurrencies designed to maintain a stable value by being pegged to a fiat currency, usually the US dollar. Tokens such as USDT and USDC typically maintain a 1:1 value against the dollar and are widely used in trade, settlements, and cross-border payments due to their relative volatility compared to traditional currencies.

According to 韩媒《先案级上》reports, the Korean financial regulatory body is preparing guidelines to allow listed companies to invest in cryptocurrency, and USDT, USDC, etc., are excluded from the list of permitted stablecoins.

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However, South Korean regulators argue that these tokens are not currently recognized within the Foreign Trade Act, a law created in 1998 and which came into force in 1999 to regulate international money flows and payments. The law requires cross-border transactions to go through designated foreign exchange banks and does not recognize stablecoins as legal foreign payment instruments.

Therefore, allowing companies to invest in stablecoins would enable firms to bypass the country’s foreign exchange control system by conducting overseas payments directly through blockchain networks. Notably, South Korean companies involved in international trade have expressed hope for the introduction of a stablecoin to prevent exchange rate fluctuations and facilitate close settlement. However, the SFC seems inclined to maintain a steady state.

Business Crypto Access Is Growing, But With Limits

The FSC’s proposed guidelines will initially allow investments in 20 non-stable cryptocurrencies with market capitalization, including assets such as Bitcoin and Ethereum. At that time, corporate exposure may reach 5% of the company’s capital, thereby helping to reduce financial risk.

The move is part of a broader shift in South Korea’s digital asset policy. In 2017, authorities imposed strict restrictions on corporate participation in crypto exchanges amid concerns about speculation and money laundering. Almost nine years later, regulators gradually opened the market to institutional investors under strict supervision.

Meanwhile, the Asian country continues to refine its comprehensive crypto regulatory framework. Bitcoinist recently reported that the FSC and the governing body have agreed to hold the majority of the shareholders in the local crypto exchange at 20% risk seeking governance and control of the founder.

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