South Korean Authority to Revise Anti-Money Laundering Procedures Prior to Stablecoin Regulation

The Financial Intelligence Unit (FIU), a leading regulatory body in South Korea, has initiated a restructuring of its anti-money laundering (AML) strategies in anticipation of the “institutionalization” of stablecoins.

The FIU announced that it will undertake stablecoin-related research through external contractors. The results will be compiled by December of this year, after which a set of guidelines for stablecoin operators and issuers will be drafted.

According to The Bell Korea, the regulator is expected to propose modifications to the Specific Financial Information Act, indicating that “significant changes” are forthcoming.

The South Korean National Assembly Building in Seoul, South Korea. (Source: National Assembly [KOGL Type 1])

South Korean Regulator Prepares Stablecoin Regulations

The regulator is likely to enforce entry restrictions and regulations concerning business conduct. Many of these regulations will probably emphasize the security of the assets backing any South Korean stablecoins, along with data reporting requirements.

An official from the FIU stated that the research report due in December would “serve as a basis for formulating AML response measures in light of developments in the virtual asset sector and the institutionalization of stablecoins.”

The official further noted that these measures would assist in “enhancing and refining the current system.”

The FIU currently plays a crucial role in overseeing domestic cryptocurrency exchanges and ensuring their compliance with AML regulations.

This reorganization suggests that the FIU anticipates becoming the primary AML regulatory authority for stablecoin issuers, despite plans to dissolve its parent organization, the Financial Services Commission (FSC).

President Lee Jae-myung has previously expressed his intention to eliminate the FSC, aiming to merge its functions with those of the finance ministry and the Financial Supervisory Service.

President Lee Jae Myung’s approval rating has dropped for the second consecutive week, reaching a record low of 51.1 percent, a poll indicated on Monday. This decline follows growing controversy surrounding his Liberation Day pardons. https://t.co/VYWndBDJoZ

— The Korea JoongAng Daily (@JoongAngDaily) August 18, 2025

However, recent announcements regarding government plans have not mentioned the dissolution of the FSC. Additionally, the Blue House has assigned it crypto-related responsibilities for 2025.

FIU Set for Significant Regulatory Role?

The FIU’s intentions, which include conducting a study on international stablecoin regulations, suggest that the regulator expects to oversee the industry prior to the implementation of new legislation.

Several stablecoin proposals are currently under consideration at the National Assembly. However, lawmakers have yet to finalize the specifics of these draft laws and are still discussing issues such as the potential introduction of stablecoin lending services.

Critics have pointed out that the Financial Action Task Force (FATF) and other organizations have cautioned that the adoption of stablecoins may heighten money laundering risks.

The Bell Korea highlighted that numerous countries, including the United States, have been “swift to develop countermeasures.” In contrast, it noted that South Korea is a “latecomer” in this area, as it “still lacks a comprehensive system.”

The media outlet also mentioned that South Korea “still lacks a clear legal definition of stablecoins.”

To date, most AML-related legislation (including the Special Financial Transactions Act) and regulations pertain to exchanges and cryptocurrency wallet operators.

Major Companies Prepare for Stablecoin Initiatives

While lawmakers have yet to reach a solid consensus on stablecoin legislation, both major political parties agree that businesses should be permitted to issue or utilize KRW-pegged coins.

The headquarters of the South Korean tech giant Naver. (Source: Maskkwon [CC BY-SA 4.0])

Some of the largest banks and technology firms in the country have responded by registering trademarks related to stablecoins.

Others have already established dedicated stablecoin business divisions while awaiting approval from the National Assembly.

Experts anticipate that companies like Kakao and Naver will make notable advancements in the stablecoin sector.

Both already possess a sophisticated array of web-based services, encompassing e-payment platforms, banking, and software-as-a-service (SaaS) solutions.

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