South Korea is warming to the idea of digital asset payments by allowing foreign visitors to convert crypto assets to fiat. The country now allows tourists to convert stablecoins into cash using Kaia ATMs at major tourist destinations.
DaWinKS and Kaia DLT Foundation collaborated to establish the crypto-enabled kiosks. The firm also revealed that the ATMs support Kaia-issued USDT – a type of Tether’s USDT formed from the merger of Klaytn and Finschia.
South Korea limits locals from using crypto ATMs
Both companies said the ATMs are available in the country’s infrastructure, such as convenience stores and transit hubs. According to both firms, the crypto-enabled kiosks are easy to use, and foreign visitors can withdraw fiat in 85 currencies or deposit funds onto a local transit card.
South Korea has also barred locals from using the crypto ATMs, even if they have digital assets. Dr. Sangmin Seo, chairman of the Kaia DLT Foundation, argued that the country really desires to pursue the stablecoin industry, even through experimental implementation.
Locals have reportedly attempted to access the machines discreetly, despite being limited to only tourists. It has raised questions about how local authorities are able to implement the ATMs’ restrictions and whether the demand for stablecoin conversion exists beyond the target user base.
Seo maintained that the machines are faced with challenges such as know-your-customer rules for background checks and identity verification. He also believes that KYC causes major delays for offline Web3.
DaWinKS revealed that its ATMs include passport- and face-scanning authentication procedures similar to those used at airport immigration in Korea. The firm said the machines will be available at seven strategic locations in the country, including NSeoul Tower, Homeplus (Hapjeong and CentumCity), LIFEWORK Mega Store Myeongdong, Lotte Mart (Gwangbok), NamDaeMun Exchange Cafe, and Myeongdong Money Club.
The company’s CEO, Jong-myeong Lee, also mentioned that it is building a global footprint for stablecoin usability.
Seo believes that DaWinKS’s solutions, under the government’s sandbox licenses, will allow financial technologies to connect and resolve such issues reliably, without inconveniencing consumers. He also noted that many local businesses want to incorporate their fintech features with digital teller machines.
Kaia DLT Foundation’s CEO added that businesses want to include features like debit cards, vouchers, foreign-only casino or resort payments, and also medical payments. He acknowledged that the ATMs can be compatible with any other fintech solutions, which bridge digital assets to real-world, cash-down activities.
South Korea introduces stablecoin legislation
South Korea doesn’t have a unified regulatory framework for stablecoins, which Seo said makes it hard for locals to follow. On Monday, the country’s ruling and opposition parties tabled stablecoin legislation that targeted crypto regulation.
The country’s Democratic Party official Ahn Do-geol filed legislation for won-pegged stablecoins that sought to ban interest payments. The ruling People Power Party’s Kim Eun-hye also submitted a competing bill seeking to exclude any ban on interests.
Richard O’Carroll, APAC regional manager at hardware wallet company OneKey, argued that Korea’s stablecoin regulation needs to combine government oversight with private sector freedom.
“While government control is necessary for monetary sovereignty, consumer protection, and systemic risk management, excessive restrictions could undermine Korea’s competitiveness in the global digital asset landscape.”
-Richard O’Carroll, Senior Professional Commercial Manager at APAC.
Under Ahn’s legislation, stablecoin issuers are required to obtain Financial Services Commission approval and maintain a minimum capital of $3.6 million. Kim’s bill seeks to boost innovation in crypto payments.
South Korea’s newly elected president, Lee Jae-myung, also advanced his crypto-friendly agenda in June, issuing new stablecoin legislation for companies. The Digital Asset Basic Act seeks to only allow firms with 500 million won ($366,749) to issue stablecoins. The president also argued that South Korea needs to establish a won-pegged stablecoin to prevent national wealth from moving overseas.
