Korean Companies Use Stablecoins for $620M in Overseas Payments Amid Domestic Regulatory Lag

South Korean companies have utilized stablecoins for overseas transactions exceeding KRW 853.9 billion (USD 620 million) from January 2021 through September 2023, according to a Web3 market research firm. The data, analyzed by Taigere Research using Alum blockchain platform statistics, excludes virtual asset exchange deposits and investments but includes payments for goods and services.

Major companies have already begun testing stablecoin-based international remittance and payment systems. Hyundai Motor and Hyundai Card completed a pilot in July where Hyundai's U.S. subsidiary paid MXN 20,000 via Tether (USDT) to its Mexican branch before converting back to USD. They are now conducting follow-up tests with European subsidiaries.

PoSCO International has successfully tokenized receivables during trade processes and is collaborating with Hana Financial Group and Upbit operator Dunamu to build blockchain-based international payment infrastructure.

Businesses are turning to stablecoins to reduce costs and time associated with traditional international remittance, which requires multiple intermediaries. Stablecoin transactions can occur 24/7 without bank operating hours, improving corporate cash flow efficiency.

However, domestic regulations remain stalled, preventing companies from directly using stablecoins for payments and settlements. While regulators announced plans to gradually permit corporate virtual asset trading last year, implementation has not yet occurred for listed companies or professional investment entities. Currently, only non-profit organizations and crypto exchanges are permitted to sell virtual assets.

The Digital Asset Basic Act, which would establish a regulatory framework for stablecoins, faces delays due to disagreements over regulating domestic stablecoin issuers and exchange major shareholders. Analysts warn that without timely regulation, related businesses and infrastructure could become established overseas instead of domestically.

According to Taigere Research Senior Analyst Jo Yun-seong, 'Domestic regulations have effectively blocked the on/off ramp between fiat and digital assets for corporate accounts,' forcing companies to store stablecoins abroad or cash out in Hong Kong before repatriating funds. He emphasized that once international infrastructure is established overseas, bringing it back domestically could become difficult, necessitating prompt regulatory action.