"Using won-denominated stablecoins for trade is still difficult… legal groundwork must be put in place"

As the idea of using stablecoins (cryptoassets pegged to fiat currencies) for trade settlement gains traction worldwide, a proposal has emerged calling for swift establishment of a legal framework to enable the use of won-denominated stablecoins in trade.

Cha Sang-jin, managing partner and attorney at law firm BECOM, said on the 2nd at the National Assembly Members’ Office Building that “while using stablecoins for trade offers advantages such as lower remittance fees and faster settlement, Korean companies are still in a situation where it is difficult to use stablecoins as a means of payment for trade settlement.” He made the remarks at the 'Stablecoin-Based Trade Finance Policy, Regulatory and Financial Strategy Seminar.'

Cha cited reduced intermediary fees, shorter settlement times and greater transparency as key benefits of using stablecoins for trade payments.

However, he explained that despite these advantages, it is difficult for domestic businesses to use them under the current system. “There is no rule that explicitly bans the issuance of won-denominated stablecoins itself, but it is difficult to secure trust because there is no reserve protection or supervisory framework,” he said, adding, “If trust is hard to secure, it is true that from a corporate standpoint there is hesitation to accept won-denominated stablecoins as payment.”

Reporting requirements are also a stumbling block. Cha said, “Under the Foreign Exchange Transactions Act, if you make a trade settlement without going through a bank, you must report it in advance to the Minister of Economy and Finance,” adding, “However, the current reporting form has no stablecoin item, making reporting virtually impossible. Even if you try to receive payment in stablecoins, there is a high likelihood the report itself will be rejected.”

Cha then suggested the following directions for future institutional improvements: ▲establishing a stablecoin-based payment reporting system ▲allowing digital-asset services for corporations ▲regulatory alignment linked to the Framework Act on Digital Assets. He stressed, “For payment reporting, issues can be addressed through measures such as delegating reporting tasks to virtual asset service providers that are familiar with cryptoasset-related operations.”