South Korea is mulling banning USD-based stablecoins, especially Tether’s USDT and Circle’s USDC, from its upcoming corporate crypto rules.
According to a local publication, the country’s watchdog, the Financial Services Commission (FSC), will exclude dollar-denominated stablecoins from the ‘corporate virtual currency trading’ guidelines.
The report noted the move was designed to “prevent indiscriminate investments’ in the early stages of the market.
Additionally, the current legal framework, the Foreign Exchange Transactions Act, does not treat stablecoins as a means of external payment. A recent push for the amendment of the Act to include stablecoins has yet to be ratified.
Even so, local firms had requested that stablecoins be included to help them hedge against exchange rate risks and drive faster settlements.
South Korea proposed crypto rules
For over nine years, South Korea’s crypto scene has mostly been dominated by individual retail investors. However, there has been strong institutional crypto adoption across the U.S., the E.U., and parts of Asia.
As such, South Korea has opted to set clear rules for local corporations seeking to engage in the sector.
These rules will be rolled out in the upcoming FSC’s corporate crypto trading rules.
Per the proposal, eligible firms will invest up to 5% of their capital in crypto. However, the investment will be restricted only to the top crypto assets, including Bitcoin [BTC] and Ethereum [ETH].
Besides, transactions will be conducted strictly through regulated exchanges such as Upbit and Bithumb.
That said, South Korea has been pushing for stablecoins denominated in Korean Won (KRW) since last year to reduce reliance on US dollar alternatives.
So, the need for monetary sovereignty could also be another key reason for excluding USDT and USDC. In fact, China and Russia have made similar moves, underscoring stablecoin adoption as a national security issue among key players.
Stablecoins, or digital currencies pegged to various traditional currencies, have grown to over $300 billion amid explosive global adoption. The crypto rails have made stablecoins a low-cost and fast way to send remittances and international payments.
Stablecoin activity in Asia
However, U.S dollar-based USDT and USDC control over 90% of the market share. But there’s a likely looming showdown as various jurisdictions position themselves to fight US dollar dominance.
Interestingly, Asia has emerged as a key stablecoin corridor, accounting for 60% ($245 billion) of total activity in 2025. Asia-originated activity is primarily driven by Singapore, Hong Kong, and Japan. But most of these countries are pushing to secure their turf from U.S dollar stablecoins.
It remains to be seen how these proposed foreign stablecoins will compete with USDC and USDT in the near future.
Final Summary
- South Korean regulators and lawmakers are considering excluding USDT and USDC from corporate crypto trading guidelines
- Broader Asia dominated global stablecoin activity, driving $245B in 2025, but individual countries are pushing for stablecoins pegged to their local currencies.
