South Korea Weighs Letting Fintech Firms Enter Cross-Border Crypto Transfer Business

South Korean authorities are reviewing a plan to allow fintech companies to participate in a new cross-border virtual-asset transfer regime due to take effect in December, SBS Biz reported on June 19. The details of the enforcement decree could broaden the market for blockchain-based overseas remittances and foreign-exchange services.

The government has recently started drafting an enforcement decree for the revised Foreign Exchange Transactions Act and is reviewing registration requirements for virtual-asset transfer operators, the report said.

The amended law, promulgated on June 2, will take effect in December after a six-month grace period. It defines cross-border transfers of virtual assets, or cryptocurrencies, as a virtual-asset transfer business under the Foreign Exchange Transactions Act and brings the sector under a formal management and supervisory framework.

Virtual-asset transfer operators will be required to register with the finance minister. They must also report relevant information through the Bank of Korea's foreign-exchange data network when cross-border transfer transactions occur. The government aims to bring crypto transfer transactions, which have so far remained outside the foreign-exchange regulatory system, into the formal framework to manage money-laundering and illegal foreign-exchange risks.

The Ministry of Economy and Finance and the Bank of Korea are gathering industry feedback through meetings and other channels, according to the report. They are working on the detailed design of the system with the goal of putting it in place within this year.