Korean Financial Supervisory Service Official Says Stablecoin Payments Should Be Governed by the Electronic Financial Transactions Act

According to Yonhap News Agency, Shim Eun-seop, director general of the Electronic Financial Inspection Bureau of the Financial Supervisory Service, said at a panel discussion held on Nov. 10 at the Financial Investment Education Institute in Yeouido, Seoul, that if stablecoins are used as electronic payment methods, applying the Electronic Financial Transactions Act is unavoidable from the perspectives of fairness with existing electronic payment methods, user protection and stability of payment settlement. He pointed out that applying different laws to the same payment settlement transaction depending on the payment method could create regulatory arbitrage confusion. He proposed introducing a small-scale licensing system under the act and imposing obligations such as stability safeguards, establishment and reporting of terms and conditions, protection of prepaid and settlement funds, protection of transaction information and dispute resolution.

Kim Bo-il, head of the Virtual Asset Team at the Bank of Korea, said it is necessary to consider the extent to which the national payment system should rely on global private networks. He added that his earlier proposal that stablecoin issuance should start with banks at the center and then expand issuer eligibility after technical verification was a compromise. In the government bill for the Digital Asset Basic Act expected to be released this month, stablecoin issuers are expected to take the form of bank-led consortiums.

Source: TechFlow