[Full Text] Han Seo-hee: "Even if trade payments are sent via stablecoins, they may not be received domestically"

On the 12th, Han Seo-hee, a lawyer at the law firm Kim & Chang, spoke at the seminar titled 'Building Trust Infrastructure and a Safe Ecosystem for Won Stablecoins' held in the 8th meeting room of the National Assembly in Yeouido, Seoul.

Concerns have been raised that ahead of the introduction of the won stablecoin, not only issuance regulations but also the distribution infrastructure necessary for actual payments and overseas remittances must be established. It was explained that under the current system, even if foreign companies send trade payments via stablecoins, domestic companies may face difficulties in receiving them or converting them into won.

On the 12th, lawyer Han Seo-hee stated this at the seminar held in the 8th meeting room of the National Assembly in Yeouido, Seoul.

Lawyer Han noted, "Currently, there seems to be a significant consensus on the issuance by licensed operators, securing 100% of reserve assets, and the right to redeem at face value in the legislation related to won stablecoins," and added, "The areas that need further discussion in the future are the distribution structure."

She particularly pointed out the institutional problems that may arise during the payment process of overseas trade payments.

Lawyer Han explained, "Corporate accounts for virtual asset (digital asset) exchanges need to be opened quickly so that companies can receive trade payments in stablecoins."

She further indicated, "There has been no clear discussion on how banks can handle stablecoins," and pointed out, "Alternative institutions also do not have corporate accounts, making it difficult to receive payments even if trade payments are sent via stablecoins from abroad."

She also cited the situation where overseas platforms pay domestic users in stablecoins as an example.

Lawyer Han stated, "It is entirely conceivable that overseas platforms like YouTube pay domestic YouTubers in stablecoins," and explained, "In this case, even if they try to receive it through domestic exchanges, the transmission may be restricted due to issues such as mismatches in sender and receiver."

This is also related to the regulations on the transfer of digital assets under the Specific Financial Information Act. If the verification of ownership and restrictions on trading counterparties are strengthened during the transfer process through overseas exchanges or personal wallets in the future, it may become difficult to use stablecoins for overseas payments.

In contrast, in the United States, the GENIUS Act, a stablecoin regulatory law, will come into effect on January 18 next year. The Office of the Comptroller of the Currency (OCC) in the United States also announced final rules related to the issuance and redemption of dollar stablecoins last October, establishing a federal regulatory framework.

Lawyer Han assessed that unlike the United States, where regulatory systems are being organized, discussions on the timing of the introduction of won stablecoins and the establishment of distribution infrastructure are also lagging in South Korea.

She emphasized that legal grounds must also be established for domestic payment service providers to handle stablecoins.

Lawyer Han stated, "We need to discuss ways for virtual asset service providers (VASPs) to directly perform electronic payment agency services (PG) or for existing PG companies to meet the requirements to handle digital assets," and added, "To do this, the issue of recognizing stablecoins as a payment method under the Electronic Financial Transactions Act must be resolved."

Below is the full text from Lawyer Han.

Hello. I am Han Seo-hee, a lawyer at the law firm Kim & Chang.

Currently, discussions on laws related to stablecoins in South Korea are progressing significantly.

Several separate bills related to stablecoins or bills in the form of a Digital Asset Basic Law have also been proposed. As far as I know, there are about five related bills.

However, when examining these bills, most focus on the issuance of stablecoins.

In contrast, discussions on how stablecoins will be distributed after issuance and how payments and settlements will be conducted using them are relatively lacking.

I believe that in the process of establishing the won stablecoin system, discussions on both issuance and distribution and payment infrastructure should also take place.

In particular, overseas, regulatory systems for dollar stablecoins are being rapidly established.

In the United States, the GENIUS Act, a stablecoin regulatory law, is set to come into effect on January 18, 2027.

Recently, the OCC in the United States has also established related rules, laying the groundwork for using dollar stablecoins as a regulated payment method.

In this context, if the introduction of the won stablecoin system in our country is delayed, the establishment of distribution infrastructure may also be delayed.

First, let’s look at the situation in the United States.

In the United States, dollar stablecoins such as USDC (USD Coin) and USDT (Tether) have been circulating previously.

Therefore, you may wonder what will change with the implementation of the GENIUS Act.

Using stablecoins itself was not prohibited before.

However, there was no separate regulatory framework at the federal level recognizing stablecoins as a payment method.

Instead, stablecoins were utilized by obtaining licenses related to money transmission or remittance at the state level.

For example, Circle has been operating its business by obtaining relevant licenses in several states.

However, this method allows private companies to use stablecoins for payments or remittances, which differs from applying a unified payment regulation framework at the federal level.

After the implementation of the GENIUS Act, dollar stablecoins will be issued and circulated within a federal regulatory framework, which is significant.

In particular, I believe that this change could have a considerable impact on international trade and overseas remittances.

For example, consider a situation where a foreign company states that it will pay trade payments in dollar stablecoins.

As the regulatory framework is established in the United States and stablecoins are utilized as a regulated payment method, the burden on trading counterparts to accept this as a payment method may decrease compared to before.

This increases the likelihood of dollar stablecoins being used in international transactions.

Such changes could also affect our country.

In the past, the National Assembly has raised the issue of the increasing dependence on the dollar, known as the dollarization phenomenon, as one of the reasons for the need for won stablecoins.

If payments using dollar stablecoins expand internationally, the demand for their use domestically may also increase.

In particular, if convenience increases and payments using dollar stablecoins expand around overseas companies or platforms, the utilization by domestic users may also increase.

If this situation continues, there may be concerns that the status of the won as a payment method could relatively weaken.

In fact, several international organizations have pointed out the risks related to the potential for currency substitution due to the spread of stablecoins.

So, it is necessary to examine the current legal status of stablecoins in our country.

In South Korea, stablecoins are not yet clearly recognized as a general payment method.

While it is possible to trade or transfer them through digital asset exchanges, there are restrictions on using them as payment or formal overseas remittance methods under the Electronic Financial Transactions Act.

Nevertheless, the scale of stablecoin utilization in the country is quite large.

As of June 2026, approximately 2.2 trillion won has been transferred overseas, and the trading volume of stablecoins is estimated to be around 6 trillion won.

Despite the significant volume of transactions already taking place, the institutional foundation for utilizing them in actual payments has not been sufficiently established.

Moreover, regulations related to the transfer of digital assets are expected to be strengthened in the future.

It is particularly important to pay attention to the regulations on digital asset transfers under the Specific Financial Information Act, commonly known as the Special Act.

In the future, when transferring digital assets to overseas exchanges or personal wallets, the process of verifying the identity of the sender and receiver will become crucial.

For low-risk exchanges that meet certain criteria, transfers to third-party accounts may be allowed, but general overseas exchanges may find it difficult to meet these requirements.

For example, if an overseas exchange like Binance is not recognized as a low-risk exchange, the principle will be that transfers can only be made to accounts in the name of the individual.

Personal wallets must also be verified as being owned by the individual before a transfer can occur, and similar restrictions may apply to transactions in the opposite direction.

I believe that these regulations could pose problems in the future when utilizing stablecoins for actual payments.

For instance, when a domestic user transfers digital assets from their own overseas exchange account to a domestic exchange account, they only need to prove that it is their account.

However, this is different when an overseas buyer pays a domestic exporting company with stablecoins for trade.

This is because the overseas buyer and the domestic exporting company are different entities.

If the overseas buyer wants to send stablecoins from an overseas exchange to a domestic exchange, there may be issues with the mismatch of the sender and receiver.

In this case, the possibility of transfer may depend on whether the overseas exchange is recognized as a low-risk exchange.

However, it is still unclear which overseas exchanges qualify as low-risk.

Even if the implementing rules provide relevant criteria, there may be difficulties in applying them in practice.

Ultimately, even if trade payments are intended to be made with stablecoins from abroad, there may be situations where it is difficult to receive them domestically.

Similar issues may arise in payments made through overseas platforms.

For example, consider a situation where a global platform like YouTube states that it will pay domestic content creators in dollar stablecoins.

I believe that it is a plausible scenario for overseas platforms to utilize stablecoins as a payment method in the future.

However, if a domestic content creator tries to receive this in their domestic exchange account, there may be issues with the sender and receiver being different.

The ability to receive may also vary depending on which exchange the overseas platform uses.

Of course, for large companies like YouTube, there may be a lower risk because they are likely to use institutions with appropriate licenses in the U.S.

However, the constraint that stablecoins must only be transferred through exchanges that meet certain criteria still remains.

Conversely, similar issues may arise when a domestic user attempts to pay for services on an overseas platform using stablecoins.

Therefore, I believe it is necessary to review both the existing digital asset transfer regulations and the payment systems together if we want to utilize stablecoins as a payment method in the future.

Next, we should pay attention to the equivalence recognition system in the United States.

To have our country's won stablecoin recognized in the U.S., it may become important to undergo an evaluation process to determine whether our domestic regulatory framework is practically equivalent to that of the U.S.

In the system proposed by the OCC, this equivalence evaluation is treated as an important criterion.

For example, after issuing a won stablecoin in our country, to circulate it in the U.S. market, it may be necessary to be recognized that our domestic regulations are practically equivalent to U.S. regulations.

To do this, it is necessary to apply for an equivalence evaluation with U.S. regulatory authorities and undergo the relevant recognition process.

According to the criteria I reviewed, applications for this will be possible from January 18, 2027, and the relevant evaluations must be completed by July 18, 2028.

However, if the issuance of the won stablecoin in our country is delayed, the time available to prepare for this process may also decrease.

Therefore, I believe it is important to consider the timing of the introduction of domestic systems alongside changes in overseas regulatory frameworks.

Now, I will mention a few points worth noting from the U.S. stablecoin regulatory framework.

The first is the right of redemption.

Stablecoins should fundamentally allow holders to demand redemption from the issuer.

However, in the regulatory framework proposed in the U.S., it is being discussed that only those recognized as customers of the issuer can directly request redemption.

For example, let’s assume I purchased stablecoins through an exchange.

In this case, I am a holder of the stablecoins, but I may not be registered as a customer of the issuer.

Therefore, to directly request redemption from the issuer, I may need to go through a customer verification process to be recognized as a customer of the issuer.

This is referred to as the onboarding process.

The background for this structure is related to anti-money laundering issues.

If redemptions are made to anyone simply because they hold stablecoins without customer verification, there is a risk of it being misused for money laundering.

Thus, the approach of allowing issuers to provide direct redemptions only to those who have completed customer verification (KYC) is being considered.

I believe that when designing the issuance and distribution structure of won stablecoins in our country, it is necessary to reference these aspects.

The second issue is the interest and compensation related to holding stablecoins.

Currently, the related bills proposed in our country are designed to generally prohibit the payment of interest for holding stablecoins.

There has also been considerable controversy regarding this issue in the U.S.

The U.S. regulatory framework also generally prohibits the act of paying interest or compensation simply for holding stablecoins.

However, this does not mean that all forms of compensation are uniformly prohibited.

Compensation for legitimate services provided or rewards for users' direct activities can be distinguished from interest based solely on holding.

Compensation provided by third parties may also be judged separately depending on its structure and nature.

Therefore, I believe that discussions are needed in our country to distinguish between interest derived from simply holding stablecoins and rewards from actual service usage.

The third issue is whether the information recorded on the blockchain constitutes personal data.

This could become a significant issue when operating the stablecoin industry in practice.

The blockchain records public wallet addresses and transaction histories.

The criteria proposed by the U.S. OCC also address how to distinguish information like public wallet addresses from personal data.

On the other hand, in our country, there is an interpretation that public wallet addresses could also be considered personal data.

If this interpretation is widely applied, issues related to personal data protection may arise during the process of collecting or tracking blockchain wallet addresses.

However, it is crucial to track transaction histories based on public wallet addresses on the blockchain.

Especially when a hacking incident occurs, it is important to identify which wallet the affected assets have moved to or to track the activities of the attacker through public wallet addresses.

If prior consent from the wallet address owner is required every time such tracking is performed, it may become difficult to respond effectively to security incidents.

Therefore, I believe it is necessary to establish clearer criteria regarding whether public wallet addresses constitute personal data.

Now, I will mention additional considerations that need to be reviewed in the domestic won stablecoin system.

Currently, looking at domestic bills, there seems to be considerable consensus on basic issuance requirements such as issuer licensing, securing 100% of reserve assets, and recognizing the right of redemption at face value.

As mentioned earlier, other speakers have sufficiently explained the issuance structure.

I believe that an important task that needs further discussion is the distribution structure.

Currently, many businesses are preparing to participate in the stablecoin business.

However, the structure regarding who will handle payments and settlements after the issuance of stablecoins is still unclear.

It is essential to examine the roles that payment gateway companies (PG) and credit card companies can play.

In the current typical electronic payment systems, PG companies participate in the payment process and facilitate the settlement of payments with merchants.

As stablecoins are utilized for payments in the future, it will be necessary to determine how to apply this structure.

For instance, we need to discuss whether virtual asset service providers should be allowed to perform PG functions directly or whether existing PG companies should meet the requirements to handle stablecoins.

A critical legal issue in this process will be how stablecoins are recognized as a payment method under the Electronic Financial Transactions Act.

If stablecoins are not clearly defined as a payment method under the Electronic Financial Transactions Act, related businesses may face difficulties in conducting payment and settlement operations.

Next, it is also necessary to consider stablecoin payments using credit cards.

Overseas, card payment services utilizing digital assets have already expanded significantly.

Credit cards have the advantage of being connected to existing merchant networks.

In particular, utilizing global card networks like Visa or MasterCard increases the possibility of distributing and using stablecoins through existing payment infrastructure.

However, in our country, there is still no clear legal basis for credit card companies to directly handle stablecoins.

I believe it is necessary to discuss how to organize these aspects in relation to the Specialized Credit Finance Business Act and its related enforcement regulations.

Finally, we need to examine the payment structure for international trade.

I consider this to be one of the most urgent tasks.

For example, let’s assume that an overseas buyer pays trade payments to a domestic export company using stablecoins.

If the currently discussed regulations on digital asset transfers are applied, there may be restrictions on the overseas buyer directly transferring funds to the export company's account at a domestic exchange.

In that case, the overseas buyer could first send stablecoins to the corporate wallet of the domestic export company, and the export company could then transfer them to an exchange or bank.

However, this method is quite inconvenient as it requires going through a corporate wallet in between.

There is another issue as well.

Currently, there are still restrictions on corporations opening and using accounts at digital asset exchanges in our country.

Even if the export company receives payments in stablecoins, it is unclear where they can convert them into Korean won.

Therefore, I believe it is necessary to expedite the expansion of corporate account usage at digital asset exchanges.

Only by allowing corporations to use exchange accounts can a structure be established to convert trade payments received in stablecoins into actual Korean won.

The role of banks is also important.

Currently, banks are the primary financial institutions performing foreign exchange operations.

However, there has not been sufficient discussion on how banks can handle stablecoins.

If banks cannot directly handle stablecoins, there is a need for alternative institutions to take their place.

However, even if there are alternative institutions, if it is difficult to utilize corporate accounts, there will be limitations in actually receiving and settling trade payments.

Ultimately, even if trade payments are sent overseas in stablecoins, domestic companies may find themselves unable to utilize them effectively.

I believe that issues such as the payment processing structure, corporate accounts, and banks handling stablecoins must be prioritized for resolution in the distribution process.

Next, I will discuss distribution infrastructure and security systems.

Among overseas examples, I think the security standards related to stablecoins in Hong Kong are worth referencing.

In Hong Kong, the standards for key management and internal controls during the issuance and operation of stablecoins are designed quite specifically.

In particular, a system is established to manage the entire lifecycle of cryptographic keys, including their generation, storage, replacement, backup, recovery, and disposal.

Higher security standards are applied to important seeds and private keys.

From an internal control perspective, multi-signature procedures for high-risk tasks are treated as important.

For example, when performing high-risk tasks such as asset transfers or major system changes, it is not just one administrator who approves, but multiple approvals are required.

Additionally, before performing actual signatures on the blockchain, procedures to verify whether transactions or tasks are executed as intended using on-chain simulations are also important.

Security audits for smart contracts are also necessary.

In addition to regular security audits, additional audits should be conducted when upgrading smart contracts.

Thus, it is necessary to establish detailed standards not only for the authorization of issuers but also for how to operate and control the actual systems.

In Hong Kong, while the interest on stablecoin holdings is generally limited, it is necessary to distinguish rewards for marketing or separate service activities.

I believe it is essential to design domestic systems while comparing these overseas regulatory examples.

Finally, I will mention two issues to consider in the process of building domestic stablecoin infrastructure.

The first is the network separation regulation.

Financial companies in our country are subject to quite strict network separation regulations under the Electronic Financial Supervisory Regulations.

This structure separates internal and external networks and restricts communication with the outside to maintain the security of the financial system.

I fully understand that this system was established to enhance the security of financial companies.

However, there are challenges in applying the existing network separation regulations directly to blockchain-based financial services.

In particular, public blockchains are fundamentally characterized by being operated in connection with external networks.

Operating blockchain nodes or signing transactions and verifying them may require connections to external networks.

However, if the current network separation regulations are strictly applied, there may be restrictions on performing these tasks.

Therefore, I believe it is necessary to recognize separate exceptions or establish alternative control measures for operating blockchain nodes or signing environments.

Recently, discussions have been held on flexibly applying existing network separation regulations in relation to artificial intelligence or software as a service.

Blockchain-based financial services also need to design separate security systems considering their technical characteristics.

Of course, relaxing network separation regulations does not mean lowering security levels.

Rather, it means that we need to establish alternative security measures such as access control, key management, and signature management that are suitable for the blockchain environment to ensure safety.

The second issue is the use of public blockchains.

In the future, determining which blockchain to issue Korean won stablecoins on is also an important task.

I understand that there has not yet been sufficient discussion on this matter.

Like overseas examples, I believe that the issuance of stablecoins based on public blockchains should be permitted in our country as well.

Of course, since public blockchains are open networks that anyone can participate in, there may be concerns about control.

However, it is also necessary to consider the advantages of public blockchains in terms of security and transparency.

Currently, the systems related to deposit tokens or token securities being promoted domestically mainly utilize permissioned blockchain structures.

This structure has the advantage of being able to control participants and operating entities.

However, there are also risks that may arise due to the limited number of participating nodes.

For example, consider a private blockchain composed of about ten nodes.

If all of these nodes are compromised, there is a risk that the integrity of transaction histories or issuance records may be compromised.

In contrast, public blockchains have a structure where various participants verify transaction histories and share records.

Therefore, there is an advantage in ensuring the transparency of transaction records and reducing dependence on specific operating entities.

Of course, just because it is a public blockchain does not mean that all security risks are eliminated.

I believe that utilizing public blockchains with sufficient decentralization and verification structures can help enhance the transparency and stability of payment systems.

Overseas, stablecoin issuance and operation using public blockchains like Ethereum and Solana are already taking place.

In discussions regarding the stablecoin system in the United States and new regulations from the Securities and Exchange Commission (SEC), the use of public blockchains is an important area of consideration.

Therefore, I think that in our country, we should not view public blockchains merely as systems that are difficult to control, but rather examine what advantages and risks they present as payment infrastructure.

I see a need for thorough discussions on the potential use of public blockchains in the stablecoin issuance process going forward.

Now, let me summarize my points.

To establish the infrastructure for the issuance and circulation of a Korean won stablecoin, various technical and institutional standards must be developed together.

First, we need standards on how to manage wallets and private keys.

Specific criteria for asset custody and access management, multi-signature, and internal controls must also be established.

Additionally, we need to consider how to apply existing network separation regulations in the process of operating actual blockchain nodes and signing transactions.

Discussions are also necessary regarding which blockchain to utilize and how to establish security standards related to smart contracts.

It is important to have procedures in place to ensure safety through security verification and stress testing of the entire system in advance.

However, I believe that the most urgent issue to discuss at this point is the establishment of infrastructure that can actually issue and operate stablecoins, as well as ensuring that the issued stablecoins can circulate smoothly.

Even if stablecoins are issued, if payment service providers, card companies, and banks cannot handle them, there will be limitations in utilizing them as actual payment methods.

In particular, in areas where substantial demand is expected, such as payment for overseas trade or payments on foreign platforms, there needs to be an institutional foundation to receive and settle these payments.

Therefore, when discussing the Korean won stablecoin system, we must consider not only who will issue it but also who will circulate the issued stablecoins and how they will be utilized in payments and settlements.

Ultimately, what is important is not just the issuance of the Korean won stablecoin itself.

It must also be securely stored and transferable after issuance, and a structure must be established for it to be used in actual payments and remittances both domestically and internationally.

I hope that sufficient discussions on this circulation infrastructure and security system will take place in the process of establishing relevant laws and subsequent systems.

Thank you.

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